Edited extracts.
"Northern Ireland is governed best when governed locally.
"Since 2002, Mr Speaker, for reasons the whole House is aware of, that has not been possible.
"But our commitment remains absolutely clear: this government believes that 2006 can be the year for restoration of the Assembly and will work to that end as a matter of the utmost priority.
"Elections are due in May 2007. For those to be meaningful we must have an Assembly exercising its full responsibilities. We therefore need to make progress urgently. We cannot let things drift.
"Unionists and nationalists need to know that republicans are committed to exclusively lawful means.
"And republicans and nationalists have to know that unionists are fully committed to fair and equitable powersharing.
"Mr Speaker, I also wish to inform the House about the government's intentions as regards the Northern Ireland [ Offences] Bill.
"When I moved the Second Reading on November 23rd, I said that it was necessary to help bring closure to Northern Ireland's dark past of violence by resolving outstanding issues that had not been dealt with in the Belfast Agreement, primarily that of terrorist suspects 'on the run'. Following the agreement, over 400 paramilitary prisoners were released on licence.
"Although victims of atrocities were, understandably, in uproar at the sight of murderers and former terrorists walking free, it was the right thing to do to seal the agreement and lock in the peace.
"But it left unresolved an equally difficult matter: the issue of what to do about those who had committed terrorist offences before April 10th, 1998, and who, had they been in prison at the material time, would have been part of the Early Release Scheme.
"And it also left the question of what to do about others who might be prosecuted in future for crimes committed during the Troubles before the Good Friday
agreement.
"The Northern Ireland [ Offences] Bill is a challenge to everyone to look to the future, not to be trapped in the past.
"That challenge remains.
"Members of the House, particularly those from Northern Ireland, expressed their opposition to this Bill with great power and passion.
"The government still feels that it was right to introduce this legislation, not least to honour the commitment made publicly by both the British and Irish governments in 2003, a commitment that was a key building block in the process which saw the IRA end their armed campaign.
"Every Northern Ireland party vigorously opposed the Bill - bar Sinn Féin. Now Sinn Féin is opposed because they refused to accept that this legislation should apply to members of the security forces charged with terrorism-related offences.
"Mr Speaker, to exclude any members of the security forces who might have been involved in such offences from the provisions of the Bill would not only have been illogical, it would have been indefensible and we would not do it. Closure on the past cannot be one-sided.
"That was, and is, non-negotiable.
"The process would have made people accountable for their past actions through the Special Tribunal before being released on licence.
"Sinn Féin have now said that any republican potentially covered by the legislation should have nothing to do with it.
"But if nobody goes through the process, victims, who would have suffered the pain of having to come to terms with this legislation, would have had done so for nothing.
"That is unacceptable, and I am therefore withdrawing the Bill.
"Mr Speaker, when I introduced this Bill I said that I would not presume to tell any victim that they must draw a line under the past. But the government remains of the view that this anomaly will need at some stage to be faced as part of the process of moving forward.
"It is regrettable that Northern Ireland is not yet ready to do so.
"We will reflect carefully over the coming months on how to move forward on this issue, in the context of dealing with the legacy of the past. We will not rush to conclusions. I will take stock in the autumn".