The prime minister and his Irish counterpart have warned Northern Ireland assembly members they must set up a devolved government by the November 24 deadline or lose public funding.

Tony Blair and Bertie Ahern delivered the stark message during a day of talks with unionist and nationalist parties about the restoration of devolution in the province.

They told the parties it was simply not sustainable for the assembly to be subsidised by the public beyond November 24 if it could not provide a devolved government for Stormont.

Following the failure to form a power-sharing executive at the first attempt at the reformed Stormont assembly last month, the premiers are pressing for an autumn deal before the November deadline.

Blair said current efforts were "the last chance for this generation to make the process work."

Assembly members would on November 24 have their last opportunity to elect a first minister, a deputy first minister and a cabinet of ministers if Northern Ireland secretary Peter Hain is to press ahead with a restoration order for the assembly.

But failure to meet this deadline would result in the cutting off of salaries and allowances for Northern Ireland's 108 MLAs and financial assistance to parties stopping.

Blair and Ahern also signalled that if the parties do fail to achieve a devolved government, the two governments would launch new British-Irish partnership arrangements at a summit in December.

DUP leader Ian Paisley has refused to share power with Sinn Fein but has agreed to sit on a preparation-for-government committee.

He said the party will not go into government with republican Sinn Fein while the IRA is still continuing violent and criminal activity.

But Blair and Ahern reject the suggestion that the IRA ceasefire is bogus.

However they are also pressing Sinn Fein to do more to reassure unionists that they are ready for government by showing support for the police service of Northern Ireland and continuing to press for the IRA to wind down.

In a joint statement after Thursday's talks, Blair and Ahern said: "We are convinced that November is the outer limit of an acceptable timeframe.

"That would be very regrettable but everyone accepts that an assembly subsidised by the public which is not serving its community through active government is simply not sustainable.

"In this context we also took the opportunity today to review progress on new partnership arrangements that would need to be put in place to ensure our effective joint stewardship of the Good Friday agreement in the event that devolution does not take place by November 24. That work continues."