The crisis began in January when Sinn Fein pulled out of the province's government citing the "deep-seated arrogance" of power-sharing partner the Democratic Unionist Party over the DUP's handling of the abuse of an energy subsidy scheme.
A deadline for forming a new executive passed this afternoon without a resolution, after Sinn Fein said it would not nominate a Deputy First Minister.
DUP leader and former first minister Arlene Foster said: "While regrettable, the reality is that sufficient progress was not achieved in the time available to form a new executive".
A failure to reach an agreement could also lead to the possibility of a THIRD election in a year.
"The Executive can only function on the basis of equality, integrity and respect and we hadn't got those in the last Executive", he said.
"We now have a short window of opportunity to resolve outstanding issues and for an executive to be formed", he told reporters in Belfast.
Amid the trading of recriminations, Mrs O'Neill offered a very different view on culpability.
"We are standing firm - previous agreements need to be implemented", she said.
"Unfortunately the DUP maintained their position in relation to blocking equality, delivery and equality, for citizens".
Northern Secretary James Brokenshire said it was "extremely disappointing" but added there is no appetite for fresh assembly elections, or for a return to direct rule from London. These included work to set a budget and a programme for government.
Sinn Fein presented a long list of demands as conditions to re-enter government, including funding services for Irish language speakers, gay rights and inquiries into deaths during the decades of sectarian violence.
'For example, we will not be able to launch any new programmes, projects or policies which would require ministerial or executive endorsement'.
The political deadline in Northern Ireland comes just ahead of Prime Minister Theresa May launching Britain's exit from the European Union on Wednesday, when the government is due to trigger Article 50 of the bloc's Lisbon Treaty.
Martin McGuinness's funeral last week gave some hope that there could be...
Outgoing UUP leader Mike Nesbitt said the talks process was a "shambles".
He questioned why there had been no round table meeting of all the parties during the negotiations.
He said there was "no appetite for any alternative" to a devolved administration, and announced further talks between the parties in the coming days.
"We can not throw it away lightly, we must not throw it away lightly and it is now time for us to redouble our efforts and ensure that a deal will be reached".
"Everyone owes it to the people of Northern Ireland to grasp that and provide the political leadership and the stability they want".
Green Party leader Steven Agnew sais: "I feel angry".
"It's time for the DUP and Sinn Fein to step up and deliver".