Northern Secretary Paul Murphy has said it is "entirely reasonable" for unionists to refuse to co-operate with Sinn Féin following the £26.5 million sterling Northern Bank robbery that has been blamed on the IRA.
In a statement on the robbery to the House of Commons in London, Mr Murphy said the British government would only promote a power-sharing deal "if the Provisional IRA not only gives up terrorism but also all the other forms of criminality in which it is implicated.
"Unionists in Northern Ireland have made clear that if those tests are met, they will work with Sinn Féin in a power-sharing executive," Mr Murphy said.
"As my right honourable friend the Prime Minister has said repeatedly, it is entirely reasonable for unionists to withhold their co-operation until those tests are met," he said.
On Friday, PSNI Chief Constable Hugh Orde said the IRA was behind the December 20th heist. Sinn Féin has repeatedly said it believes the IRA, which has denied involvement.
Mr Murphy said the PSNI had originally thought five groups could have been responsible for the robbery but changed his opinion after further investigation.
"The Chief Constable's public remarks were necessarily constrained by the ongoing investigation. He has briefed me fully on the background which led him to make the statement he did. I have no doubt that the Chief Constable's opinion is well-founded. He did not rush to judgement."
He added: "I deeply regret that this progress has been put in jeopardy. I cannot forecast with certainty when it will prove possible to re-establish an inclusive power-sharing executive, which the government continues to believe provides the best long-term guarantee of peace and stability. We shall not abandon our commitment to that ultimate goal."
Speaking in London following Mr Murphy's remarks, Sinn Féin national chairperson Mr
Mitchel McLaughlin said Sinn Féin would stand over its record in the peace process and that the party would not take lectures from any British government on criminality.
"Sinn Féin's participation in this process and in any government is based entirely on our substantial electoral mandate and nothing else. We are the largest nationalist party in the six counties and the third largest party on this island. In contrast Paul Murphy has no mandate from the Irish people and we will not tolerate attempts by him to sanction or demonise the Sinn Féin electorate," Mr McLaughlin said.
"Furthermore Sinn Féin will not take lectures from any British government on criminality when successive British governments engaged in a policy of state sanctioned murder against the nationalist community through their control and direction of the unionist death squads. The current British government of which Paul Murphy is part continues to cover-up this activity."
DUP deputy leader Peter Robinson asked: "Why is democracy in Northern Ireland to be held back because of gunmen and gangsters?
"Surely the time has come to make it very clear that politics moves on and it moves on without them?"
Ulster Unionist MP Mr David Burnside described the statement as "vacuous and empty, with no sanctions and no threat."
