The DUP has said there is "considerable work to be done"
Political leaders have missed a deadline to restore power-sharing in Northern Ireland.
Without the deal, the country faces the prospect of direct rule from Westminster for the first time in a decade.
Downing Street said talks over a new power-sharing deal will now be allowed to continue until Monday, when Northern Ireland Secretary James Brokenshire will make a statement on the British government's intended action.
A scheduled Assembly sitting to nominate ministers was axed, with Democratic Unionist Party (DUP) negotiators announcing that there will be "no breakthrough" in the talks on Thursday.
It is the fourth time that a deadline has been missed, but the DUP's Edwin Poots has insisted talks will extend into Thursday evening and into the weekend.
Before the deadline of 4pm Thursday, he had said: "At this stage we aren't close to an agreement, there is considerable work to be done and we believe the ball is in the court of Sinn Féin in the main in dealing with a series of outstanding issues."
Minutes earlier, Sinn Féin had warned the DUP it is "make up your mind time" - with Conor Murphy claiming "limited progress" has been made in bridging the gaps between the two parties.
The two parties, whose agreement is a pre-requisite of the formation of a new administration, have been struggling to overcome differences on the Irish language.
Sinn Féin is demanding a stand-alone Irish Language Act, bringing Irish onto a par with English in the region.
But the DUP had proposed a hybrid act, accommodating the Irish language and those who speak in Ulster-Scots.
Earlier, Mr Brokenshire had claimed "significant progress" had been made in the talks.
He had insisted that a deal to restore devolution was both "possible and achievable".
According to the Alliance Party, the Cabinet minister told party leaders that he would "take the weekend to reflect" if a solution had not been reached.
The devolved government collapsed in January when Sinn Féin's Martin McGuinness - who passed away in March - resigned as Deputy First Minister.
DUP leader Arlene Foster had refused to stand aside as First Minister during an inquiry into a botched renewable energy scheme.
Sinn Féin's vote surged in the subsequent Assembly election but parties failed to share power within the six-week timeframe.
Instead of calling another election, Mr Brokenshire extended the deadline at Stormont.