The North's First Minister, Mr David Trimble, and the Deputy First Minister, Mr Mark Durkan, have welcomed the House of Lords ruling that their election last year was legal.
The decision means that Assembly elections will now not take place until next May.
In a split decision, the House of Lords rejected a DUP challenge to the election of Mr Trimble and Mr Durkan. Three law lords opposed the DUP case while two supported it. The party said it was a "hair-breadth escape" for Mr Trimble and the British government.
The DUP had lodged an appeal over the decision by the Northern Secretary, Dr Reid, not to call fresh Assembly elections last November when Mr Trimble and Mr Durkan were not appointed within the six-week period outlined by law.
The DUP believed Dr Reid's decision to extend the deadline for their election was illegal. The legal challenge was based on last September's events when devolution was suspended in the North.
The legislation allowed the pro-Agreement parties six weeks to save the Stormont administration by re-electing Mr Trimble and Mr Durkan. The first attempt to elect them failed, but then Dr Reid extended the deadline and the two men were later elected.
Following the House of Lords ruling, the DUP could take the case to the European Court. However, that process would take up to two years so the party is unlikely to do so.
Mr Trimble and Mr Durkan said they were always confident the DUP case would not succeed and they believed that Dr Reid had acted lawfully. The DUP's deputy leader, Mr Peter Robinson, claimed a moral victory. "The House of Lords split three-two decision is a hair-breadth escape for the Secretary of State and David Trimble.
"The result is indicative of the narrow constitutional ledge on which the present arrangements rest and a differently constituted court may very well have reached a different conclusion.
"This may be the end of this legal challenge, but it is the start of the countdown to the next Assembly elections and the renegotiation of the Belfast Agreement. Whilst others carped from the sidelines, the DUP decided to challenge the government's attempts to rewrite the rules to keep David Trimble in power.
"In this campaign we demonstrated our determination to fight for elections to bring about change to the institutions in Northern Ireland. In the end, the establishment rallied behind the government line, albeit by the slimmest majority." Mr Robinson said the North's electorate would be the "final jury" for both Mr Trimble and the British government in next year's Assembly elections.
Dr Reid said the ruling proved he had acted "entirely lawfully and properly to secure the stability of the institutions for the good of all the people of Northern Ireland".
The ruling was also welcomed by the Women's Coalition and the Liberal Democrats Northern Ireland spokesman, Mr Lembit Opik.