Islamic extremists could benefit from classified information the Government is striving to withhold from families bereaved in the Northern Ireland Troubles, Theresa Villiers has warned.

The Northern Ireland Secretary made the case for preventing disclosure of certain files on national security grounds as she called on politicians to re-commit to resolving a dispute that has endangered a £150 million package of measures designed to tackle the toxic legacy of the conflict.

The multimillion-pound funding commitment from the Government is on hold until a breakthrough is achieved. However, in a keynote speech on legacy issues Ms Villiers pledged to consider releasing some money early, specifically to deal with pressures on a coroners' court system struggling to process dozens of inquests relating to Troubles killings.

The Conservative MP also claimed the current controversies were placing disproportionate focus on cases where the state was involved or alleged to be involved.

"Legacy issues have a continuing capacity to disrupt that hard-won political progress," she said.

Ms Villiers is due to deliver the speech at an academic event in Belfast later on Thursday, but key extracts have been published by the Government beforehand.

A number of new legacy mechanisms are trapped in the starting blocks due to the dispute over national security disclosure.

A High Court judge undertaking a recent review of 56 legacy inquests stuck in the system, some over 40 years old, heavily criticised the resources committed to the cases by the police, military and, ultimately, the Government.

Among the initiatives in cold storage are a new independent unit to investigate unsolved murders, a truth recovery commission and academic projects to document the history of the Troubles.

Agreement has been reached on the vast majority of issues, but as the mechanisms are part of an inter-linked package, none will be implemented until the final sticking points are ironed out.

The main stumbling block centres on a dispute between the Government and Sinn Fein over the extent of official documentation that will be disclosed to families of the bereaved.

The Government has pledged to disclose all files to the new Historical Investigations Unit (HIU), but has insisted it must retain the right to prevent onward dissemination of some papers to relatives on the grounds of national security.

A row over how families could challenge decisions to withhold disclosure remains outstanding, with consensus yet to be reached on the Government's proposal for appeals to go before a High Court judge.

Ms Villiers pledged to strive for a resolution, insisting a comprehensive deal on the past was close.

"National security is not an open-ended concept which can be used to suppress information about whatever actions the State does not want to see the light of day," she said.

"In fact, as I have said, over recent years the State and its security forces have already disclosed several thousands of documents on Northern Ireland's Troubles."

She added: "And it is an inescapable fact that there is information which would put lives at risk if it were put into the public domain.

"There are notorious examples of where people accused of being informants have been hunted down and murdered.

"I do not want to be explaining to inquests in years to come why I failed to protect the information which led to more such tragedies in the future.

"And there are techniques and capabilities available to our security services that if known would be of value to terrorists.

"That's not just violent dissidents in Northern Ireland, but also Islamist terrorists who want to attack our whole way of life.

"No responsible government could allow this to happen - and we must retain the power to prevent it.

"This has led some to assume that the Government will be constantly seeking to block the onward disclosure by the HIU of information to victims' families and the public.

"This is simply not the case. The fact that disclosure of information may be embarrassing or difficult is not a justification to withholding it and no one is suggesting that it should be."

She said her proposed High Court challenge system was "fair and reasonable".

"Anyone who doubts the independence of the High Court should consider the regularity with which it rules against the UK government," she said.

Ms Villiers said the problems were not "insurmountable".

"That is why I am determined to do all I can to resolve them as soon as possible," she said.

"We owe victims and survivors nothing less."

Ms Villiers said she did not accept the argument that the inquest problems stemmed from lack of a commitment on the part of the Government or the police.

"Rather, it's a simple fact that the current system was never designed to cope with a large number of highly complex and sometimes linked cases involving very sensitive information," she said.

She added: "I understand the concern felt about resources and if reforms go forward, of course the UK Government would look very seriously at whether some of the Stormont House legacy funding could be released early to support inquests."

The Secretary of State said she was not suggesting the new legacy structures would be perfect.

"Unfortunately there is no set of proposals which could ever deliver that or make up for even a fraction of the pain and loss suffered over the 30 years of the Troubles," she said.

"But I am confident that they will be a significant improvement on what we have now. For that reason I believe that they are worth pursuing."