Intensive political talks involving the two prime ministers will be held outside Northern Ireland next month, the secretary of state has confirmed.
Mr Hain confirmed speculation about the talks venue
Peter Hain rejected criticism that taking negotiations away from Stormont was a waste of tax payers money.
The talks, which Mr Hain said were "critical", will take place in October.
Mr Hain stressed there was "no question" of an extension to the 24 November deadline for restoring devolution.
"Northern Ireland has had deadline after deadline after deadline and for all sorts of good reasons in the past they have been extended," he said.
Government sources have indicated that the talks will be held at a hotel at St Andrews in Scotland.
The DUP said last week they would prefer any intensive talks aimed at restoring devolution to be held at Stormont.
UUP leader Sir Reg Empey said "big house" talks would be a waste of money.
But Mr Hain added: "Critical negotiations will take place outside of Northern Ireland. We need to concentrate minds.
"I think it's much better to get away from the day-to-day issues and daily pressures that face all politicians.
"This will be a working conference of intense negotiations. This is not some kind of stately home exercise for its own sake.
"I believe it would be the people of Northern Ireland who will have lost out (if power-sharing is not restored) because democracy will have lost out."
Devolved government was suspended over allegations of a republican spy ring.
The court case that followed collapsed and one of those involved, Denis Donaldson, later admitted working as a British agent.
Direct rule from London was restored in October 2002 and has been in place since.