Villers says institutions dealing with past could be funded
Secretary of State Theresa Villiers has said the government could support funding for structures to deal with Northern Ireland's past.
Ms Villiers said the primary source of funding for any new bodies set up by the Haass proposals should come from Northern Ireland's block grant.
However, she added that a proposal for additional funding would be looked at.
Ms Villiers said that the creation of institutions to deal with the past was not an easy one for the government.
"The concern is that, however carefully new structures on the past are set up and however clear the criteria for their work is, there's always the anxiety that their focus will start to be on the very limited number of tragedies in which the state was involved, rather than the majority that were the responsibility of terrorists," she said.
"The fact that the state is the organisation with the records means that there's always the risk in any focus on the past that it'll become unduly and unproportionately focussed on state activities.
"But despite those risks, we're prepared to go with a compromise if the parties can agree that."
US diplomat Richard Haass chaired talks between the Northern Ireland parties on the contentious issues of the past, parades and flags.
The Haass talks broke up without a deal on New Year's Eve.
Two of Northern Ireland's five main parties, Sinn Féin and the SDLP, endorsed the proposals, but the DUP, UUP and Alliance have, so far, rejected elements of the Haass blueprint.
Ms Villiers said neither the British nor Irish governments planned to impose an agreement on the parties from outside.
"We both agree that for something to work well it needs to come from Northern Ireland, that's the principle enshrined in devolution," she said.
"I think there is very much a space for the UK government and the Irish government to work with the Northern Ireland parties to help them try to resolve their differences."
The secretary of state also said it was very important for the executive to implement welfare reforms that are being introduced in the rest of the UK.
Meanwhile, Shadow Secretary of State Ivan Lewis has said he is concerned that three years of consecutive elections could lead to a period of "timidity or political paralysis" in Northern Ireland.
"I do not fear a reversal in the progress which has been made, but equally when one considers the major economic, social and cultural challenges Northern Ireland faces standing still will mean going backwards," Mr Lewis said.
"Good leadership is about being able to enthuse and mobilise your own supporters and deliver for everyone on the 'bread and butter' issues which affect their everyday lives.
"However, great leadership in post-conflict situations is also about standing in the shoes of your former foes, demonstrating your understanding of their anxieties and aspirations and crucially sometimes saying difficult, challenging things to your own supporters."
Mr Lewis, who is visiting Northern Ireland, said although it was disappointing that no agreement was reached over the Haass proposals, it would be wrong for the British and Irish governments to try to impose a deal.
"This process was started by the Northern Ireland political leaders and we strongly urge them to see it through," he said.
"However, both governments have a clear responsibility to stay close to the process and exercise their influence in a positive way to support the difficult but necessary compromises which will be essential to any agreement."