By Guy Faulconbridge and Conor Humphries
LONDON/DUBLIN (Reuters) - Britain on Tuesday proposed the creation of an independent watchdog to monitor paramilitary organisations in Northern Ireland after a shooting linked to the Irish Republican Army (IRA) threatened to unravel a two-decade old peace deal.
The region's pro-British First Minister Peter Robinson, who last week walked out of a power-sharing government with Irish nationalists Sinn Fein, said he would need more details before deciding if his party would commit to multi-party talks.
A 1998 peace deal largely ended three decades of sectarian violence between Catholics who want a united Ireland and Protestants who want Northern Ireland to remain British.
But one of the key planks of that deal was undermined in August when police said the IRA was likely involved in the killing of a former operative, despite assurances from allies in Sinn Fein that the group had "left the stage".
Critics say the group has simply moved from political violence to organised crime.
A monitoring body and additional measures to fight organised crime might ease those concerns, the British minister responsible for Northern Ireland, Theresa Villiers, said in a speech to the British parliament.
"Serious consideration needs to be given to whether the time is right to re-establish a body along the lines of the Independent Monitoring Commission," she said, a reference to a group that was disbanded in 2011.
"We all need to work together to find a way to bring an end to this continued blight on Northern Ireland's society."
The suggestion of a new body was aimed at convincing Robinson's Democratic Unionist Party to enter talks with Sinn Fein.
Robinson said on Twitter (NYSE:TWTR) that Villiers' comments represented a "holding statement" that delayed the start of talks.
But he did not repeat an earlier threat to withdraw his party completely from government, forcing a return to direct rule from London.
Sinn Fein has said a return to direct rule would create a political vacuum that would be exploited by paramilitaries opposed to the 1998 deal.
Villiers said the current circumstances did not justify the British government taking direct rule in Northern Ireland, but that the situation was very grave and the devolved institutions looked "increasingly dysfunctional".
Sinn Fein in a statement indicated it was not willing to concede on a new monitoring body or any other issue before the start of multi-party talks.
In addition to a deal on dealing with paramilitary activity and organised crime, the British government wants talks to force the implementation of social welfare cuts in the province, which have been delayed by years of political paralysis.
Generous funding from London has helped Northern Ireland recover from three decades of sectarian violence that killed 3,600. But it remains the region most dependent on government spending in the United Kingdom and politicians have said severe cuts could destabilise the province.