Attempts to restore Northern Ireland's devolution would probably be put back until 2009 if the 24 November deadline is missed, the NI secretary has said.
Peter Hain was addressing the British-Irish Association conference
Peter Hain said the two governments were unlikely to make further attempts until after the next general elections.
The assembly's dissolution would mean "the melting away of a political class and a generation of young people robbed of economic opportunities", he said.
He said the world would move on without politicians who "miss the opportunity".
In a speech to the British-Irish Association conference in Oxford, Mr Hain said the 24 November deadline to restore devolution was not negotiable.
He warned that if this was not met, "Northern Ireland will slip further behind in the global economic race and community relations will stagnate or deteriorate as each side blames the other for the lost opportunity".
Mr Hain moved to reassure unionists that they had "every right to be confident in their culture, in their politics, in their politicians" as the "ballot box is the ultimate guarantor of security".
"In a power-sharing government based on equality, everyone is stronger by definition, because everyone is respected and given weight.
"The Union of 2006 is different from the Union of 1926 or of 1966. Being part of the Union now means being part of a forward-looking, dynamic economy and a society that has long ceased to be mono-cultural.
"The Union itself is evolving - it is not fossilised - and Northern Ireland cannot proceed as if it was hermetically sealed from that development."
'Deep and lasting security'
Mr Hain said that "if unionists seize the initiative in November... the prize will be the opportunity to transform the economic and social prospects for the next generation".
"Progress in Northern Ireland built on equality and partnership will provide the deep and lasting security which both communities crave, he said.
Devolution was suspended in October 2002, but Northern Ireland's parties have been back at Stormont since May.
They have been sitting in a so-called "virtual assembly" which can meet and debate - but not pass legislation.
The 108 MLAs have been warned that if the deadline is not met, their salaries and benefits will stop and the assembly will be put in mothballs.
What happens after that remains unclear, other than Dublin and London say they remain committed to implementing the rest of the Good Friday Agreement, with a step-change in north-south co-operation.