The Monday talks were the third such session in as many weeks between the Ulster Unionist leader and nationalist Garvaghy Road spokesman Breandan MacCionnaith.

As Mr MacCionnaith arrived for the talks he insisted that nationalist residents in Portadown will not accept the Orange Order march through their area this summer.

He said residents at a meeting on Sunday night had said they were opposed to any move which would see the march down their area, following "10 months of intimidation" by Orangemen at Drumcree.

Portadown Orangemen have been protesting at Drumcree since last July when the independent Parades Commission banned the annual march from the mainly nationalist Garvaghy Road area.

They insist that they should have the right to march on this part of the route, which for a number of years has led to violent clashes between Protestants and Catholics and between both sides and the police.

Cash deal denied

Mr Trimble, also arriving for the talks, denied speculation that a £25m spending package had been offered by the government in an attempt to resolve the issue.

"It is a silly story by a person who should know better than to place it in a newspaper," Mr Trimble said.

The financial package - half to Orangemen and half to local nationalists - had already been denied by Mr MacCionnaith and the Orange Order.

"There have been absolutely no proposals put to us about a deal, and it's clear that the issue of the Garvaghy Road is not negotiable," said Mr MacCionnaith.

Ulster Unionist leader Mr Trimble, who is also an Orangeman, was joined at the talks by other local Ulster Unionist councillors who are Orangemen.

Also taking part were Sinn Fein Assemblywoman Dara O'Hagan, SDLP Assembly member Brid Rodgers and Alliance Party representatives.

But Co Armagh Orange Grand Master Denis Watson and Craigavon Democratic Unionist mayor Mervyn Carrick refused to attend, and the Orange Order is not officially represented at the talks.

Mr Watson and Mr Carrick maintain that the Garvaghy Road protest has been orchestrated and manipulated by Sinn Fein.

Orange deadline

Local Orangemen have vowed to sever all contacts with government, local politicians and the police unless the dispute is resolved to their satisfaction by 30 June.

This is also the deadline set by UK Prime Minister Tony Blair for the devolution of power to the Northern Ireland Assembly.

David Jones, the spokesman for Portadown Orangemen, accused politicians of "lack of interest" in the Drumcree problem.

David Jones: Politicians 'lack interest'

"If they haven't over that time come to some sort of resolution, we feel that come the end of June, there is little point in trying any further," he said.

Mr MacCionnaith condemned the ultimatum. He said: "The Orange Order are saying they have only one thing in mind, the destruction they have organised around Drumcree in previous years.

"They intend to do something similar again this year. This is an indication that they intend going ahead with mass demonstrations in Portadown.

"This community [Garvaghy Road] views Orange marches as a very sinister and public way in which they have suffered sectarian harassment."