Dublin should be given a consultative role in formulating the north's budget while the DUP's boycott of the institutions continues, the SDLP has said.
The party's two MPs have tabled an amendment to the Westminster Budget Bill which they say would mandate the British government to engage with their Irish counterparts on the terms of any financial settlements.
The bill is scheduled to be debated by MPs on Monday when they return from summer recess.
Foyle MP Colum Eastwood and South Belfast MP Claire Hanna's proposal comes after the secretary of state warned that the north's deepening financial crisis cannot be remedied with a British government bailout alone.
Chris Heaton-Harris was speaking at the British-Irish Association Conference in Oxford, where he also restated his commitment to restoring the Stormont institutions.
Read more:
- Heaton-Harris denies ‘tough budget' will be punishment for Stormont not sitting
- Heaton-Harris asks for advice on water charges and tuition fees increase
Civil servants have been running Stormont's departments in the absence of executive ministers.
A DUP boycott of devolution in protest at post-Brexit trade arrangements means there has been no functioning government for the past ten months.
Mr Heaton-Harris told the conference that resolving the political impasse was his top priority and that political dysfunction was limiting opportunities for people in the region.
"I am fully aware of the calls for me to step in and take the decisions that the absent executive is neglecting," he said.
"But I make no apology for holding firm in my position of believing in devolution, believing in power-sharing, and believing in that historic (Good Friday) Agreement that was signed 25 years ago."
The secretary of state said it was a "source of extreme disappointment and frustration" that devolution had not been restored.
He said an executive was needed "so that ministers can take the tough decisions needed to balance the budget and raise the necessary revenue".
"That is why I have urged the party leaders to work with the Northern Ireland Civil Service to agree a sustainable and credible Programme for Government that will allow an incoming executive to take action from day one," he said.
"The problems facing Northern Ireland cannot be fixed with a sticking-plaster funding settlement, which would not do anything to address the structural problems that have been building for years."
Tánaiste Micheál Martin told the conference on Friday that the British and Irish governments must work in "lock step" to ensure stability in the north in the absence of devolution.
The SDLP said the MPs' amendment would place a duty on the secretary of state, in the absence of an executive, to consult with the Irish government on the north's budget.
Mr Eastwood MP said the budget tabled by Mr Heaton-Harris in June would have a "devastating effect" on public services.
“The DUP can’t be allowed to call the shots anymore, they need to understand that power-sharing will endure, whether they like it or not and whether they take part or not," he said.
"In the absence of an executive, the spirit of the (God Friday) Agreement must be facilitated by enhanced cooperation between the British and Irish governments."
Ms Hanna MP said the budget as planned would "deliver hardship" and fail to tackle issues around the transformation of services.
"We must also be cautious of the false economy of penny pinching today only to have to pay a bigger price down the road – urgent reform of services cannot be put off," she said.
