Northern Secretary Peter Hain said he is optimistic that political institutions in Northern Ireland will be restored this year.
Mr Hain said politics in Northern Ireland had been "completely transformed" in 2005.
Peter Hain
"We've had a whole series of seismic events take place, one of them being the IRA statement at the end of July followed by the decommissioning of its arsenal signalling from their point of view that the war was over," he told RTÉ radio this morning.
"Yes there's a lack of trust and the 'Stormontgate' spy business and the on-the-run (OTR) leglisation have bedevilled the process but I'm optimistic that when talks begin after the report of the Indepent Monitoring Commission is received in early February then we can begin to make some progress," he added.
Mr Hain said all parties wanted to see the Assembly up and running but had different ideas on how to achieve it.
"We've got to start political talks and get people moving forward. Things can't go on as they are. We can't have Assembley members drawing £85,000 on average each in salary and expenses and not perform their legislative function," he said.
Mr Hain said Republicans needed to accept that legislation was needed on the OTR issue. "If Republicans do not want to accept amended legislation on the OTR issue, then tough. Legislation is needed. They need to accept it," he said.
Proposed legislation on the issue was withdrawn yesterday after Sinn Féin urged Republicans not to take advantage of it when it became clear that members of the British Army and police involved in murders would also have qualified.
"When it became evident that Sinn Féin, which had asked for this legislation in respect of on-the-runs, had instructed the on-the-runs not to use it because it included and applied to the security forces, what was the purpose of proceeding with legislation designed to achieve an objective for which the people were not going to insert themselves?" Mr Hain asked.
"How on earth they thought security forces could be excluded, I don't know."
Additional reporting PA