Taoiseach Micheál Martin and new British Prime Minister Rishi Sunak have agreed there is an "urgent need" for a functioning executive in Northern Ireland.

Speaking by phone tonight for the first time since Mr Sunak took office, the two leaders vowed to work closely together.

Mr Martin, who congratulated Mr Sunak on his appointment, said they both agreed on the importance of EU-UK engagement to find agreed solutions to the issues around the Northern Ireland Protocol.

For his part, Mr Sunak said his preference remains a "negotiated outcome" on the protocol.

A Downing Street spokeswoman said: "The leaders agreed on the vital importance of a strong relationship between the UK and Ireland and expressed their determination to build on that friendship in the coming months.

"The Prime Minister welcomed Ireland's ongoing support for Ukraine, and the leaders agreed on the importance of continued international unity in the face of (Vladimir) Putin's aggression.

"Discussing the Northern Ireland Protocol, the Prime Minister set out that his preference remained a negotiated outcome and hoped all parties would approach the current challenges with pragmatism and goodwill.

"The leaders agreed on the urgent need for a functioning executive in Northern Ireland. Both undertook to continue discussions in the coming weeks and months."

Mr Sunak also spoke with European Commission President Ursula von der Leyen, who called it a "very good phone call".

She tweeted: "(The EU and UK) are strategic partners.

"Looking forward to working on crucial issues such as Russia's war on Ukraine and climate change.

"And on finding joint solutions under the (Northern Ireland) Protocol on IE/NI that will provide stability and predictability."

'Indefinite block'

Earlier, the Taoiseach said there cannot be a return to the direct rule arrangements of the past if there is a sustained period without a functioning Northern Ireland Executive,.

Micheál Martin told the Dáil that the Government wanted to see an Executive formed along with the running of an Assembly.

However, he warned that if that does not happen, the Irish Government would fully pursue its "consultative role" in non-devolved Northern Ireland matters, which is provided for under the Good Friday Agreement.

He said that a failure to form an Executive was a denial of democracy.

"Europe stands ready to be flexible in terms of all matters pertaining to the protocol," Mr Martin added.

Sinn Féin Leader Mary Lou McDonald said that if there is an "indefinite block" to the formation of a new Executive, then the only alternative would be joint authority from Dublin and London.

She said that Mr Sunak takes office at the time of great strain between the "two Islands" and a relationship based on good faith is needed if there is to be "new start".

Ms McDonald said her party's message to the DUP was "end you boycott, work with us". She said the protocol was working and can work better.

Meanwhile, Northern Ireland Secretary Chris Heaton-Harris is determined to push ahead with calling an Assembly election if power-sharing institutions are not restored by Friday, Stormont party leaders have said.

Mr Heaton-Harris was holding discussions with Northern Ireland's political leaders this evening as a deadline for calling another election approaches.

DUP leader Jeffrey Donaldson has said he is "ready to fight" the new election, while Sinn Féin Stormont leader Michelle O'Neill said the priority should be the restoration of the executive.

Alliance Party leader Naomi Long said the election was the last thing people in Northern Ireland wanted, while Ulster Unionist leader Doug Beattie said it would lead to further polarisation.

The Northern Ireland Secretary has repeatedly warned that he will call a Stormont poll if Friday's deadline passes without a devolved executive being formed.

The DUP has refused to engage with the devolved institutions in Belfast in the wake of May's Assembly election, meaning it has not been possible to form an executive.

The party's boycott is part of a campaign of opposition to the protocol and it says it will not return to power-sharing until decisive action is taken to remove the protocol's economic barriers on trade between Great Britain and Northern Ireland.

Mr Heaton-Harris, who was reappointed in his role by Mr Sunak yesterday, repeated today his warning over another election, indicating that the change at No 10 has not altered the government's position on the issue.

Asked about the prospect of an election, the prime minister's official spokesman said: "That position remains that it will be triggered on the 28th. The exact date for the election will have to be set out subsequently."

A 24-month legislative time frame to form an administration expires just after midnight on Friday.

If no ministerial executive is in place by then, the UK government assumes a legal responsibility to call another election.

Additional reporting: Mícheál Lehane, PA