The Northern Ireland Secretary has said he will introduce new legislation taking a “pragmatic, appropriate and limited approach” to addressing the political deadlock after the latest deadline to restore Stormont passed.

Chris Heaton-Harris said his legislation will also “support Northern Ireland departments to manage the immediate and evident challenges they face in stabilising public services and finances”.

The Stormont Assembly has been collapsed for almost two years while the DUP refuses to participate until unionist concerns over post-Brexit trading arrangements have been addressed by the UK government.

Senior civil servants are running Stormont departments with limited powers in the absence of local ministers.

Sir Jeffrey Donaldson’s party maintained their position during a final failed attempt to recall the Assembly following a motion by Sinn Fein on Wednesday.

Chris Heaton-Harris had been under an obligation to call a fresh election if the institutions were not restored by January 18.

Minutes after midnight he issued a statement signalling that he intends to introduce new legislation.

He said he was disappointed that the Assembly and Executive had not been restored.

Thursday saw more than 150,000 public sector workers take part in the biggest strike in recent history in a demand for the pay uplifts given to their colleagues in the rest of the UK.

While in December Government offered a financial package worth more than £3 billion – including money to make the outstanding pay awards – it will not be made available until Stormont returns.

Mr Heaton-Harris came under pressure to intervene to release the funds in the absence of Stormont ministers, but he insisted public sector pay was a devolved matter.

In his statement in the early hours of Friday, Mr Heaton-Harris said events in Northern Ireland this week “have shown the urgent action which is required to address a whole range of issues facing Northern Ireland”.

He went on: “I remain of the belief that a sitting Northern Ireland Executive is best placed to act quickly and effectively to resolve those issues.

“In the absence of a sitting Northern Ireland Executive I will update Parliament on the next steps.

“I intend to introduce new legislation which will take a pragmatic, appropriate and limited approach to addressing the Executive Formation period and support Northern Ireland departments to manage the immediate and evident challenges they face in stabilising public services and finances.”