Tony Blair and Bertie Ahern travelled to Northern Ireland to unveil their blueprint for restoring devolution.
They confirmed the assembly will be recalled on 15 May with parties being given six weeks to elect an executive.
If that fails, the 108 members get a further 12 weeks to try to form a multi-party devolved government. If that attempt fails, salaries will stop.
The British and Irish governments would then work on partnership arrangements to implement the Good Friday Agreement.
Mr Ahern has acknowledged the difficulties facing himself and Mr Blair were compounded by the murder of ex-Sinn Fein official and former British spy Denis Donaldson in County Donegal.
Despite denials of involvement in Tuesday's murder, the Democratic Unionist Party is blaming the IRA and that has pushed the prospect of power-sharing even further away.
BLUEPRINT TIMETABLE Assembly recalled on 15 May: politicians given six weeks to form executive If this fails, further 12 weeks after summer recess to form executive If this is not achieved by 24 November deadline, assembly members' salaries and allowances stopped Governments would then work on partnership arrangements to implement the Good Friday Agreement
In full: Joint NI statement Reaction to governments' plan
Speaking from Navan Fort in County Armagh on Thursday, Mr Blair said it was "a moment to let the process be governed, not by suspicion but by the faith that the other does want this to succeed."
"We have today set out a framework beginning with the recall of the assembly on the 15th of May and running up to November of this year for that ultimate decision to be made," he said.
"At that point we close the chapter... or we close the book."
Mr Ahern said the politicians have been given a "finite" time to reach agreement.
"It is time to talk and to agree, people are entitled to firm assurances that if there is deadlock that it will not be allowed to continue indefinitely," he said.
The Stormont government has been suspended since October 2002
Sinn Fein leader Gerry Adams said there were "negatives and positives" in the statement.
"We welcome that the assembly has been brought together... we have concerns about the timeframe, about other aspects of the statement, but we think that's a good forward step.
"We would like to think that unionism generally would see it as a positive opportunity."
DUP leader Ian Paisley said: "Currently there is no evidence that Sinn Fein/IRA will be any further advanced in giving up criminality in November.
"Given the reality that there will be no executive formed for the foreseeable future the best way forward is to get working in the assembly."
Ulster Unionist leader Sir Reg Empey said he welcomed the recall of the assembly.
"We urgently need to have an input into, and make changes to, direct rule decisions on education, water rates and the Review of Public Administration to name but three. This is our job."
He said the statement provided opportunities and threats, adding it was time to seize the opportunities and minimise the threats.
Devolved government at Stormont was suspended in October 2002 following allegations of a republican spy ring.
Mr Donaldson was one of three men later acquitted of charges linked to those allegations.
Logo of the Northern Ireland Assembly.
British Prime Minister Tony Blair and Irish Taoiseach (Prime Minister) Bertie Ahern have unveiled their plan to restore a power-sharing executive government in Northern Ireland by a deadline of November 24.

The plan calls for the Northern Ireland Assembly's members to be recalled on May 15 and given six weeks to form an executive. If no results comes within six weeks, then the members are to be given another 12 weeks to attempt to form an executive. After that, if no result is achieved by November 24, then the salaries of all members will be suspended, and the Irish government will be given greater influence in Northern Ireland.

The Assembly has been suspended since October 2002 following the allegation of the existence of a republican spy ring.

Blair and Ahern acknowledged the diffculty of implementation of the plan, which has been hampered by the murder this week of Denis Donaldson, a former British spy in Sinn Fein.

Blair said of the plan, "We have today set out a framework, beginning with the recall of the assembly on the 15th of May and running up to November of this year, for that ultimate decision to be made. At that point we close the chapter ... or we close the book." His verdict on the plan was, "If the parties really can't find a way forward, we have to call a halt and find a different way forward."

Ahern said, "It is time to talk and to agree. People are entitled to firm assurances that if there is deadlock that it will not be allowed to continue indefinitely." His verdict on the plan was, "I don't look at the end date of this. In fact, I look at this as a start of a process. I do not want on 24 November to be thinking about another plan."

Ian Paisley, the leader of the Democratic Unionist Party said "The DUP will not be forced, rushed or bullied into accepting any level of IRA criminality. Currently there is no evidence that Sinn Fein/IRA will be any further advanced in giving up criminality in November." Paisley also denounced the involvement of the Irish government, saying, "This part of the UK is not really a part of the UK but is a part of the UK where a foreign government has more say over Northern Ireland than the people of Northern Ireland."

Gerry Adams, the President of Sinn Fein, said that the statement contained "negatives and positives." "We welcome that the assembly has been brought together ... we have concerns about the timeframe, about other aspects of the statement, but we think that's a good forward step. We would like to think that unionism generally would see it as a positive opportunity. I appeal to Unionism to seize this opportunity. It is about a shared future for all the people on this island. It appears that they the two governments are saying to the DUP, 'If you don't come on board, we are going to go ahead without you.' "

The leader of the Ulster Unionist Party, Sir Reg Empey's response was, "We urgently need to have an input into, and make changes to, direct rule decisions on education, water rates and the Review of Public Administration, to name but three. This is our job." Empey was also critical of the DUP's statement, saying, "We have been told by the Democratic Unionist Party that the Belfast agreement was binned, consigned to the dustbin of history. Looking and listening to today's press conference, it didn't look binned to me. It's actually back centre stage."

The SDLP's Mark Durkan said, "All we have today is an 11-paragraph announcement that tells us less rather than more. That's why the SDLP will need to see the legislation that follows it. It may be better — or indeed worse." He further added, "A shadow assembly was agreed between the DUP and Sinn Fein in 2004, in the so called comprehensive agreement. We are still living with the damage caused by that bad deal."

United States President George W. Bush issued a statement saying, "Today is an opportunity for all in Northern Ireland to take control of their future and bring the political process to a successful completion this year." "We remain steadfast in our support of the peace process and the efforts of the British and Irish governments to achieve a lasting peace under the principles of the Good Friday Agreement."