Sinn Fein’s Martin McGuinness leads other party members out to talk to the press at Stormont Castle yesterday

The Government faces a "smash the IRA and we'll talk" ultimatum from the two main unionist parties.

Secretary of State Theresa Villiers will give her response in a special statement to the House of Commons.

Ulster Unionist leader Mike Nesbitt told the Belfast Telegraph: "What we are looking for is a concerted clampdown on fuel smuggling and other rackets in which paramilitaries are involved, both loyalist and republican."

Mr Nesbitt added: "A lot of this could be carried out by the National Crime Agency (NCA) and Her Majesty's Revenue and Customs (HMRC), both of which are funded by central government and would have no implications for our budget. She could also provide additional assistance to the PSNI, but this is not yet decided."

Mr Nesbitt said Northern Ireland also needs a new 'ceasefire watchdog' like the old Independent Monitoring Commission (IMC) "to keep the score and monitor progress on dismantling these structures".

"We need an outside monitor because there is no credibility in what Sinn Fein are saying. I mean Bobby Storey saying the IRA is like a butterfly which flew away, it is just not credible."

Mr Nesbitt made it clear he would not take part in round table talks unless and until his requirements were met.

DUP leader Peter Robinson has similar demands which he put to Ms Villiers last Friday. He and his party met her again yesterday afternoon.

To increase the pressure, the DUP have resigned all their ministries except for First Minister and Finance, both of which are being held by Arlene Foster while the crisis continues.

Ministers will be reappointed and asked to resign again each week to prevent a nationalist getting the posts, the DUP has stated. DUP MLAs are also reducing their involvement in Assembly business.

After yesterday's meeting Mr Robinson confirmed that he had asked the government to commit to reviving an IMC.

This body was first set up in 2004 to monitor the paramilitary ceasefires and completed its work in 2011.

The new version would concentrate more on criminality and structures and unaccounted for weapons.

The old IMC stated that not all paramilitary armaments, loyalist or republican, had been decommissioned.

Mr Robinson has previously said he had six items on his agenda but yesterday he declined to elaborate on what was needed, saying the discussions were confidential.

The DUP leader said: "The government now knows our views on the issues; I certainly don't expect to get an answer before the Secretary of State would get on her feet in the House of Commons tomorrow.

"We will listen to what the government has to say and we will reach conclusions as a party after that."

Other parties were less relaxed about the delay. Martin McGuinness of Sinn Fein wanted talks but thought that it might come to an election if the unionists kept on making demands. "I want to see, and am working for, talks to take place with a view to a successful outcome," he said.

"But if talks are not going to take place, or if talks do take place and there is no successful outcome, then in my view the next logical step is an election."

He added: "There really are only two choices and they are talks, a successful outcome, or elections."

Dr Alasdair McDonnell of the SDLP called for more US involvement while David Ford of Alliance said that the talks must address all the issues including "the poison of paramilitarism."

After meeting all the parties individually through the day, Ms Villiers said: "We need urgently to find a way forward so that intensive and focused talks can take place that lead to the full implementation of the Stormont House Agreement and address issues arising out of continued activity by paramilitary organisations.

"All the parties I saw today agree that if the devolved institutions are to retain credibility and function effectively, these are the most urgent questions to resolve.

"I plan to update the House of Commons tomorrow and resume discussions on Wednesday."

Belfast Telegraph