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The Democratic Unionist Party (DUP) will not agree to the election of a new Stormont Speaker on Friday, its leader Sir Jeffrey Donaldson has said.
The assembly is scheduled to meet later for the first time since the 5 May election.
The DUP has been protesting against post-Brexit trading arrangements.
Sinn Féin vice-president Michelle O'Neill said the DUP's decision would "punish the public".
"They are disgracefully holding the public to ransom for their Brexit mess," she added.
Without the election of a Speaker, MLAs cannot take their seats and there would be no functioning assembly.
Unionist politicians have protested against the Northern Ireland Protocol, a part of the UK-EU Brexit deal which keeps Northern Ireland aligned with the EU single market for goods.
The move was designed to ensure free trade could continue across the Irish border.
However, Sir Jeffrey has argued the protocol has eroded the foundations "devolution has been built upon" and undermined Northern Ireland's position in the UK by imposing additional checks on the movement of some goods from Great Britain to Northern Ireland.
"Unionist concerns over the Northern Ireland Protocol are not merely some political squabble which is impacting upon Stormont," he said in a statement.
"The protocol is a direct challenge to the principles that have underpinned every agreement reached in Northern Ireland over the last 25 years," Sir Jeffrey added.
"The economic and political damage to Northern Ireland we see now is merely the tip of the iceberg and will only increase significantly as time moves on."
The UK Attorney General Suella Braverman has said action to deal with issues caused by the protocol had become "painfully, apparently necessary".
Speaking on the BBC's Question Time, she did not deny reports the government had been provided with legal advice that it would be lawful to override parts of the Brexit arrangements for Northern Ireland.
Ireland's foreign affairs minister, Simon Coveney, said the EU would not "renegotiate a treaty that has been signed, agreed and ratified" by the British government.
He told BBC Radio 4's Today programme there were issues with the implementation of the protocol, but said unilateral action by the UK would damage its reputation.
Meanwhile, The Guardian has reported that a delegation of US Congress members are to travel to hold talks on the protocol in Belfast, Dublin, London and Brussels.
What happens if no Speaker is elected?
- Without a Speaker there can be no debates, no committees, nor private member's bills or assembly scrutiny of ministers
- There can also be no election of the first and deputy first ministers
- Current ministers can continue to oversee their departments in a caretaker capacity, however, their powers are limited without being part of an executive.
The DUP leader's comments on the election of a Speaker were first reported by the News Letter on Friday.
Sir Jeffrey, whose party supported Brexit, said he would wait to hear the government's plans to deal with the protocol before his party would decide on its next steps.
The DUP, now Northern Ireland's second-largest party by assembly seats after the election, had previously said it would not nominate ministers to form a new governing executive until its concerns about the protocol were resolved.
The election cemented a majority for assembly members who accept the protocol, including the new largest party, the republican party Sinn Féin, which is entitled to nominate a first minister.
But as it is a joint office, the DUP must also nominate a deputy first minister.
A bad omen for Stormont
For Stormont's 90 newly elected MLAs - 18 of them first timers - today should be about getting back to business.
But with the DUP's refusal to support a new Speaker there can be no business at all.
We can also for now rule out the nomination of a deputy first minister by the DUP - buoyed by UK-EU tensions on the protocol the party has decided to raise the stakes further.
Without a speaker the assembly must effectively lie dormant - MLAs can officially sign in but that is it.
Today is Friday the 13th - unlucky for some.
And perhaps not a good omen for what lies ahead at Stormont later.
On Friday, Michelle O'Neill said it was "shameful" that there would be no executive or assembly.
"Today is the day we should be forming an executive to put money in peoples pockets and to start to fix our health service," she tweeted.
"The DUP have confirmed they will punish the public and not turn up."
Alliance Party leader Naomi Long described the situation as "incredibly frustrating".
"If they're not willing to get into government, the UK government needs to adjust the law in order that the rest of us can do our jobs," she told BBC News NI's Good Morning Ulster.
"No party should be able to lock us out of government and when you play with fire, you will get burned."
Colin McGrath, of the Social Democratic and Labour Party (SDLP), said the DUP leader would try to "cover his tracks for not doing what any democratic society asks people to do".
"The DUP will throw everything they can today to try and defend their indefensible actions," he added.
The Ulster Unionist Party's (UUP) Andy Allen said he understood the DUP's position, but did not agree with the steps they are taking.
"People will come to harm, people will be impacted as a result of that and there needs to be a long hard look at that," he explained.
Proceedings at Stormont are due to begin at 12:00 BST.