By Ian Graham
BELFAST (Reuters) - Talks to save Northern Ireland's devolved government ran straight into an obstacle on Monday as Irish nationalist party Sinn Fein repeated its demand that Democratic Unionist Party (DUP) leader Arlene Foster not return as first minister.
A snap election on Friday saw Sinn Fein surge to within one seat of the DUP and deny pro-British unionist politicians a majority in the British province's local assembly for the first time since Ireland was partitioned in 1921.
The election result could have dramatic implications for Northern Ireland's politics and constitutional status.
The two parties have shared power for a decade in a compulsory coalition that is a key part of the 1998 peace deal that ended three decades of sectarian violence. Their government collapsed in January after Sinn Fein withdrew support over Foster's handling of a controversial energy scheme.
They now have three weeks to form a new power-sharing government to avoid either devolved power returning to London for the first time since 2007 or the prospect of a third election in less than a year.
"Arlene Foster's position is a matter for herself. Our position is on the record and very clear in relation to what we think needs to happen," Sinn Fein's Northern Ireland leader Michelle O'Neill told reporters.
Sinn Fein, the former political wing of the Irish Republican Army, has for weeks insisted among its demands that it will not support the nomination of Foster as first minister while months of investigations get underway into the abuse of the heating subsidy she established as a minister.
That would not stop it backing another DUP nominee for first minister while Foster stays on as party leader.
But Foster, who survived an IRA bomb attack on her school bus and whose father narrowly avoided being killed in an IRA shooting, has said she will not be dictated to by Sinn Fein, a position so far overwhelmingly shared publicly by her party.
Sinn Fein, whom O'Neill said would meet all other parties throughout the week, also wants Northern Ireland to set rights for Irish language speakers into law, another demand Foster has said she will never accede to.
The DUP leader did not speak to the media after meeting Britain's Northern Ireland Minister James Brokenshire.
The Irish and British governments, who are co-guarantors of the two-decade old peace deal, have urged the parties to engage quickly, particularly as Britain is preparing to launch formal divorce proceedings from the European Union.
Northern Ireland is the poorest region of the United Kingdom and potentially the one most economically exposed to Brexit, as its frontier with the Republic of Ireland is the UK's only land border with the EU.
"The North doesn't have a voice really on Brexit at the moment because there is no executive so it really does behove the parties to come together. This isn't a time for red lines," Irish minister Leo Varadkar told national broadcaster RTE.
(Writing by Padraic Halpin; Editing by Catherine Evans)