British Prime Minister Rishi Sunak has said he believes there is a "very good basis" for the Stormont Executive to be restored.
Devolved government in Northern Ireland has been effectively collapsed for almost two years amid DUP protest action over post-Brexit trading arrangements.
The DUP has insisted it will not go back into power-sharing government until it secures legislative assurances from the British government on Northern Ireland's trading position within the UK.
DUP leader Jeffrey Donaldson indicated earlier this week that his party's talks with the UK government over the Windsor Framework are set to resume.
Last December, during talks with the Stormont parties, Secretary of State Chris Heaton-Harris said a £3.3 billion (€3.8 billion) financial package would accompany the return of devolution.
The package would include money to make an outstanding pay award to public sector workers who are set to stage one of the biggest strikes in Northern Ireland's recent history next week.
The Northern Ireland Office previously said the package will remain on the table until a new executive is formed to allocate it.
'Decision time'
Meanwhile, Sinn Féin's Michelle O'Neill said it is "decision time" for the DUP on whether to return to Stormont, adding the party had "dragged this out for far too long".
"Our public sector workers are being forced to take the position that they are taking because they have been denied fair pay and safe working conditions for many people, particularly those who work in our health service," she said at Belfast City Hall.
"We have had years of under-investment in this place, just before Christmas the British government have finally recognised that we have been underfunded.
"What we need to see now is a restored executive and all of the parties working together. We take the financial offer and we want to add to that financial contribution because the Treasury have failed public services here.
"This is decision time for the DUP. They need to make a decision once and for all, they have dragged this out for far too long.
"Public sector workers are waiting anxiously to know if they are going to get money into their pockets which they absolutely deserve. We support that."
Asked whether she thought Mr Donaldson would make a decision before 18 January, she said that was a question for him.
"Jeffrey Donaldson has told us on many occasions that he was intending to go back to the executive, let's hope well before January 18 deadline that he makes the right call," she said.
Speaking during Prime Minister's Questions in the House of Commons today, Mr Sunak said there is a "real chance" to restore the Executive.
He was responding to a question from North Down MP Stephen Farry (Alliance) who emphasised that Northern Ireland is seeing its public services "in huge crisis", adding there are urgent public sector pay pressures that must be addressed.
He asked Mr Sunak did he "recognise the real dangers of continued drift in Northern Ireland and the urgent need for Northern Ireland to have a government".
Mr Sunak responded saying his government's focus "has always been on delivering for the people of Northern Ireland who rightly expect and deserve their locally elected decision makers to address the issues that matter to them".
"We have held talks with the DUP and believe that significant progress has been made and that there is now a very good basis for the Executive to be restored," he said.
"I thank him for his comments about the £3 billion financial package and with that there is a real chance to restore the Executive, resolve pay for public sector workers rapidly and get Northern Ireland and its public services moving again."
