A sign stands in front of Stormont Castle in Belfast, Northern Ireland June 28, 2017. REUTERS/Clodagh Kilcoyne

BELFAST (Reuters) - Northern Ireland’s main political parties are to continue talks aimed at restoring the British region’s devolved government on Wednesday, a British government official said, in an apparent extension of a deadline for a deal.

Representatives of Irish nationalists Sinn Fein and the pro-British Democratic Unionist Party (DUP) ended their second day of talks aimed at re-establishing a power-sharing government that collapsed in January, the official said.

The British government has indicated that if the parties fail to reach agreement in the coming days it will be forced to impose a budget directly for the first time in a decade to ensure essential services are funded.

A budget set by the British government would be a major step towards direct rule from London, which could destabilize a delicate political balance there.

On Monday the British government’s minister for Northern Ireland, James Brokenshire, said if there was no progress by the end of talks on Tuesday he would assess whether London needed to move impose a budget. The spokesman declined to comment when asked when that decision would be made.

The DUP and Sinn Fein have shared power for the past decade in a system created following a 1998 peace deal that ended three decades of violence in the province.

Sinn Fein pulled out in January, complaining it was not being treated as an equal partner.