Irish premier Leo Varadkar has said there is a “real possibility” Northern Ireland’s powersharing institutions could return before Christmas or in the new year.

Mr Varadkar said that if it does return, it will be important to ensure there is a programme for government and a financial package in place to make its return sustainable.

But he said he was not “complacent” about any possible difficulties that may arise.

“For now, it’s still plan A,” Mr Varadkar told reporters at a Fine Gael conference in Co Kildare.

“We still believe it’s possible to have the executive and Assembly, all institutions of the Good Friday Agreement, up and running, perhaps (in) the next few weeks, perhaps in the new year.

“And there are contacts, there are discussions going on behind the scenes at the moment, and they’re making some progress.”

Devolved government in Northern Ireland has been on hold for more than a year-and-a-half amid the DUP’s stand-off over new rules around the movement of goods to and from Great Britain.

The Government agreed the Windsor Framework with the EU earlier this year in an attempt to address concerns raised.

However, the DUP has been in talks with the UK Government since then and is refusing to re-enter the Stormont Assembly and executive until remaining gaps are addressed.

And what's really important too, in my view, is that it's sustainable

Earlier this week, Secretary of State Chris Heaton-Harris indicated that he believes the talks are in the “final phase”, while DUP leader Sir Jeffrey Donaldson said they were “in the process of refining legislation” that protects Northern Ireland’s ability to trade within the UK.

Speaking on Saturday, Mr Varadkar said: “I’m probably a little bit more encouraged now than maybe I was a few weeks ago, but not by any means complacent about the difficulties that are going to arise.

“And I think the British-Irish Council next week in Dublin, and the (British-Irish Intergovernmental Conference) is an opportunity to further develop that.”

Mr Varadkar will attend the British-Irish Council while deputy Irish premier Micheal Martin will attend the British-Irish Intergovernmental Conference.

“I believe there is a real possibility that we could get the Assembly and executive up and running again, either before Christmas or in the new year,” Mr Varadkar added.

“And what’s really important too, in my view, is that it’s sustainable.

“It’s not going to be any good to anyone if (it) then just collapses six months later, so (it’s) important that there’s a programme for government, important that there’s a good financial package, because the new Northern Ireland executive will have some very difficult decisions to make, but we should try and make it easier for them in my view, and that’s going to be an important part I think in any package.”