A former US diplomat has expressed concern over a potential return to serious violence in Northern Ireland if issues from the past are not dealt with.

Dr Richard Haass insisted a recent Stormont controversy over on-the-run republicans was not an excuse for political leaders to walk away from continuing efforts to make progress.

His efforts to negotiate a deal on long standing disputes on flags, parades and the toxic legacy of the Troubles ended on New Year's Eve without consensus.

Addressing a Congressional committee in Washington today, he urged politicians to "act for the greater good" and face up to the fact they could not achieve everything they wanted.

"I don't see the society sowing the seeds of its own normalisation, of its own unity, if neighbourhoods and schools are still divided," said Dr Haass.

"What worries me in that kind of an environment, particularly where politics are not shown to be making progress, alienation will continue to fester and violence, I fear, could very well re-emerge as a characteristic of daily life.

"So it is premature to put Northern Ireland, as much as we would like to, into the 'out box' of problems solved."

He added: "I'd love for it to be there and I look forward to that day, but quite honestly it is not there yet."

While blueprint proposals emerging from Dr Haass's cross-party talks process remain on the table, efforts to strike a deal in his absence have made little progress.

One of the five parties involved - the Ulster Unionists - withdrew from negotiations on the proposals last week in the wake of the latest crisis to rock the power-sharing institutions at Stormont.

It was triggered when details emerged about a deal Sinn Féin had struck with the government that saw on-the-run republicans sent letters telling them they were not wanted by police.

Announcing the move, UUP leader Mike Nesbitt accused Sinn Féin of "bad faith" in their handling of the issue.

The controversy developed when a case against a man accused of the IRA bombing of Hyde Park, John Downey, collapsed because he was mistakenly sent one of the so-called assurance letters stating he was not wanted by the authorities.

But unionist politicians focused their fury on the fact a process to send letters out existed in the first place.

They claimed it was concocted by Sinn Féin and the previous Labour government without their knowledge.

Both the republican party and representatives from the previous and current governments in London have insisted the letters did not amount to an amnesty. They said they were only statements of fact that, at the time of writing, authorities were not seeking certain individuals - a situation that could change if new evidence emerged.

British Prime Minister David Cameron has ordered a judge-led review into the scheme.

Northern Ireland Secretary Theresa Villiers today confirmed that Lady Justice Hallett will conduct the independent review.

Dr Haass said his only knowledge of the letters came from the public exchanges since the issue gained prominence in recent weeks.

But he expressed confidence that they had not granted effective immunity to recipients.