Northern Ireland Secretary James Brokenshire
Following the snap election in early March the main political parties could not reach an agreement.
The two biggest parties, the DUP and Sinn Féin, blamed each other while Sinn Féin's Michelle O'Neill said her party walked away from negotiations because the DUP did not have "the right attitude".
Talks collapsed on Sunday night after Sinn Fein announced it would not be nominating a deputy first minister in the Assembly on Monday.
Without both first and deputy first ministers it is impossible to form an executive.
Making the announcement, Northern Ireland Secretary James Brokenshire, said there was “no appetite” for another snap election.
Martin McGuinness' life in pictures Tue, March 21, 2017
The former deputy first minister of Northern Ireland, has passed away aged 66
Play slideshow AFP/Getty Images 1 of 13
Martin McGuinness and Tony Blair look on at Stormont Parliament Buildings in Belfast in 2007
Mr Brokenshire has said a "short window of opportunity" exists to restore a power sharing executive in the region.
Now, the parties will have more time to try to come to an agreement.
However, Mr Brokenshire said this time period would amount to "a few short weeks".
Sinn Fein Leader Michelle O'Neill walked away from talks on Sunday
Mr Brokenshire was clear this could cause problems as Northern Ireland reaches the beginning of a new financial year with no plan nailed in place.
Sir Malcolm McKibbin, head of the civil service in Northern Ireland, wrote to all his staff.
He said: "Our aim is to ensure 'business as usual' as far as possible though, as I said in my last letter, there will be some things we will not be able to do.
"For example, we will not be able to launch any new programmes, projects or policies which would require ministerial or executive endorsement.
"Departmental accounting officers will also have to be prudent and aim to avoid committing to new patterns of expenditure which would go beyond what they might reasonably expect to be allocated in a budget for 2017/18 once this is agreed."
James Brokenshire said there will be more time for discussion in Northern Ireland
A further statement will be made in Parliament tomorrow.
However, it was clear devolution will not be suspended for control to go back to Westminster.
Mr Brokenshire said there remains "an overwhelming desire" for strong and stable devolved government.