STORMONT'S political leaders are still bitterly divided over the implementation of controversial welfare reforms, Theresa Villiers has said.
The Northern Ireland Secretary, who is chairing crisis talks aimed at saving the devolved administration, said little progress had been made on the vexed issue during the most recent discussions at Stormont House.
She said: "We didn't make any real progress on the welfare issues we discussed this morning.
"There is still a long way to go."
The Stormont Assembly has been in disarray since the murder of a man by IRA members in August.
Kevin McGuigan (53) was shot dead in front of his wife in the staunchly republican Short Strand area of east Belfast in what police believe was a reprisal for the murder of a one-time associate and former IRA commander, Gerard "Jock" Davison, 47, three months earlier.
A police assessment that individual members of the Provisional IRA were involved in the shooting has piled pressure on Sinn Fein to explain how the supposedly defunct organisation still exists and prompted unionists to pull out all ministers but one from the power-sharing Executive.
Sinn Fein has rejected the accusations and Deputy First Minister Martin McGuinness has challenged political rivals making claims about the party's links to criminality to "put up or shut up".
Prior to the McGuigan murder, the future viability of the institutions had already been in doubt as a consequence of long-standing budgetary disputes, with the row over the non-implementation of the UK Government's welfare reforms the most contentious.
Ms Villiers said it was "crucial" to find consensus on finances.
She added: "It is crucial that the welfare and finance provisions of the Stormont House Agreement are implemented because if they are not, more and more money will continue to pour into an unreformed high cost welfare system in Northern Ireland, leaving less and less for crucial front line public services.
"That could threaten the whole future of the devolved institutions."
The Stormont House Agreement was struck in December 2013 following weeks of intensive talks and included a package of measures designed to protect benefits claimants.
However, Sinn Fein pulled its support for welfare reform earlier this year, accusing the DUP of acting in bad faith.
Ms Villiers is expected to make a speech at the Conservative Party conference before returning to Stormont for a further round of negotiations on Wednesday.
