BELFAST (Reuters) – Pro-British unionists and Irish nationalists held last-minute talks on Monday to restore Northern Ireland’s power-sharing government ahead of a deadline that would push the region towards direct rule from London for the first time in a decade.

If the Democratic Unionist Party (DUP) and Irish nationalist Sinn Fein fail to reach agreement on Monday, the British government has said it will bring in legislation to set a budget for Northern Ireland.

That would be a major step towards direct rule from London, which observers have warned could destabilise a delicate political balance in the British region.

A spokesman for British Prime Minister Theresa May said there were “significant gaps” between the parties but that the government did not want to see a return to direct rule.

The outcome of talks is not expected to have an impact on the DUP’s agreement to support May’s government in the British parliament.

The DUP and Sinn Fein have shared power for the past decade in a system created following a 1998 peace deal which ended three decades of violence in the province.

But Sinn Fein in January pulled out complaining it was not being treated as an equal partner.

Talks between Sinn Fein and the DUP have stalled in recent weeks, in large part over proposals to improve the rights of Irish language speakers.

Sinn Fein regional assembly member Conor Murphy on Monday said a deal could be done but that the DUP had to make concessions.

“If the political institutions are to be sustainable then they must be restored on the basis of equality, rights and respect,” he said in a statement ahead of the talks.

While the DUP also said it wanted to see the executive re-established, it called for London to bring forward the budget “to bring a measure of good government to Northern Ireland”.

The party will not accept “a bad agreement cobbled together to suddenly suit the timetables of others”, it said in a statement ahead of the talks.

The British government has made clear that if there is no deal by the end of Monday it will move to pass an annual budget for the region to ensure essential services are funded.

If agreement is reached, James Brokenshire, Britain’s minister for the region, would return to London to begin the processes required to form a new Northern Ireland Executive.