There will be no Stormont election in December, Secretary of State Chris Heaton-Harris has confirmed this morning following meetings held with party leaders this week.
After much speculation a poll would be held as the deadline to restore devolution passed, Mr Heaton-Harris said: "At midnight on 28 October, I came under a duty to call an Assembly election.
"Since then, my engagement with the political parties has continued. I have had valuable conversations with people across Northern Ireland, including business and community representatives. I have listened to their sincere concerns about the impact and cost of an election at this time.
"I can now confirm that no Assembly election will take place in December, or ahead of the festive season. Current legislation requires me to name a date for an election to take place within 12 weeks of 28 October and next week, I will make a statement in Parliament to lay out my next steps.
"My objective, what the people of Northern Ireland deserve, is the restoration of a strong devolved government. My duty is to create the right environment for the parties in Northern Ireland to work together to restore the devolved institutions and deliver on crucial issues impacting Northern Ireland's people.
"I do not take this duty lightly, nor do I overlook the very real concerns people have around their cost of living."
Sinn Féin Stormont leader Michelle O'Neill accused Mr Heaton-Harris of "adding to political instability".
She described his earlier announcement that there would not be an Assembly election in December as a "bizarre U-turn".
"Today's announcement is more dithering and indecision from the British Secretary of State and a continuation of the Tory chaos in London that is now paralysing our politics," she said.
"Chris Heaton Harris met with political parties this week and failed to give any indication of what he announced today.
"Instead, he has confirmed the bizarre U-turn he made last week but once again he provides no clarity or certainty on what his next steps even are.
"The British government are fuelling the political instability caused by the DUP's failure to recognise the result of the May election when the people voted for change.
"The British government and the DUP are leaving us in a prolonged state of political limbo with no Assembly, Executive or caretaker ministers.
"This is totally unacceptable at a time when workers, families and small businesses are struggling through the cost-of-living crisis and a cold winter, and when our health service needs immediate investment."
Ms O'Neill urged Mr Heaton-Harris to "outline now exactly what the British government intends to do to restore the political institutions".
She also said he must explain how the British government proposes to give people in Northern Ireland the £400 cost-of-living energy payment.
"Delays and indecision is not an acceptable situation for people here who need help now," she said.
Reacting to Mr Heaton-Harris's statement, DUP leader Sir Jeffrey Donaldson called for a "razor sharp focus on getting a solution, whether by negotiation or legislation" to the protocol.
"There is no solid basis for a fully functioning Stormont until NIP is replaced with arrangements that unionists can support. Progress in NI only made when unionists & nationalists are aboard," he tweeted.
SDLP MP Claire Hanna said the decision not to have a Stormont election this side of Christmas is the "right call".
"It's probably polite and in the spirit of how things used to be done in the peace process that when somebody U-turns to the right position you don't give them too much of a hard time about it," Ms Hanna told RTÉ Morning Ireland.
"The election wasn't going to resolve anything. It was going to probably deepen divisions and blow 6 million pounds and eight weeks when we've a lot to do.
"I think what will be the test is the steps that the Secretary of State sets out now because there is a lot to be done in terms of legislating for a budget, resolving the issues around what powers civil servants have to act in the interim and setting out steps on how Assembly protocols might be reformed to prevent this sort of veto.
"Yes, (Chris Heaton-Harris) has done a big U-turn and he hoist himself in his own petard by being so definitive in the run-up to last week, but we'll give him a bit of space to try and fix some of these problems because they are fixable."
UUP leader Doug Beattie welcomed the announcement there will be no election.
"I think it takes political courage to change your mind when you get something wrong. He (Chris Heaton-Harris) got something wrong. The 28th of October was never a deadline. It was always a guideline," he told the BBC.
He said work needs to be done to find a solution to concerns around the Northern Ireland Protocol.
"The bottom line to all of this is we need to get the executive up and running so we can start providing for the people of Northern Ireland," he said.
Dublin's foreign affairs minister Simon Coveney also welcomed the decision.
Mr Coveney tweeted: "Fully share the Secretary of State's objective; restoration of functioning institutions in NI.
"We had a good discussion this week, including on legal obligations under NDNA (New Decade New Approach).
"No election pre Christmas is welcome and creates space for progress on other matters. We remain in contact."
Sinn Féin MLA John O'Dowd said a decision over a fresh Stormont election should have been taken a week ago.
He described a "classic example of Tory chaos being imposed upon the people".
"Now we have no executive, no election, no budget, no ministers, and people facing a deepening economic crisis, particularly in light of yesterday's announcement from the Bank of England that interest rates are going to rise," he told BBC Radio Ulster.
"So this is a classic example of Tory chaos being imposed upon the people.
"Chris Heaton-Harris is part of the political difficulties we find ourselves in... he (Chris Heaton-Harris) has made Liz Truss look competent and I thought that was impossible. The guy has caused major problems here, he has shown his inability to lead, to show a willingness to work with the political parties here or to show any sort of respect for the people we're supposed to represent."
Mr O'Dowd also blasted the DUP and said they should be in the executive working with the other parties.
"It is no longer acceptable for them to boycott government," he added.
Speculation was heightened on Wednesday after Steve Baker, a junior minister in the Northern Ireland Office, insisted the date for an election will be confirmed soon.
In February, the assembly collapsed when the DUP's First Minister Paul Givan resigned in protest over unionist concerns at the Northern Ireland Protocol.
The British government has vowed to secure changes to the protocol, either by a negotiated compromise with the EU or through proposed unilateral domestic legislation, the Northern Ireland Protocol Bill, which would empower ministers to scrap the arrangements without the approval of Brussels.
The European Commission has said the latter approach would breach the terms of an international treaty and potentially prompt retaliatory action.
