Northern Ireland First Minister Mr David Trimble was tonight under pressure to rescue a north Belfast peace plan after nationalists rejected the deal.
Mr Trimble and the Deputy First Minister Mr Mark Durkan must now produce new proposals amid fears that loyalist paramilitaries will order Protestants to quit negotiations at the Ardoyne sectarian flashpoint.
The pair had intervened in an attempt to ease tensions which have remained dangerously high since last year's Holy Cross primary school blockade.
But Catholic parents who came under blast-bomb attack as they escorted their children to class during the three-month picket have refused to sign up to a road realignment and security wall package.
The plan tabled by Mr Trimble and Mr Durkan also involved nationalists in the lower Ardoyne entering into direct dialogue with Protestant neighbours in the Glenbryn enclave.
Sources close to the process have warned that paramilitaries were now pressing loyalist representatives for results.
"If the ministers don't give a steer next week as to what they are going to do, you could find the Glenbryn community walking away," one said.
Nationalists who rejected a peace plan want to drive Protestants from their homes, it was claimed today.
Mr Billy Hutchinson, a loyalist member of the Northern Ireland Assembly, hit out after the proposals to ease tensions were turned down.
Mr Hutchinson claimed nationalists never intended to agree the deal, which also involved talks between the two sides.
The Progressive Unionist MLA said: "They have rejected it because it's a strategy from republicans to make sure Protestants get it tight in north Belfast," he insisted.
"It's about driving Protestants out of their homes."
The plans involved realigning the Ardoyne road which parents and children walked up during the troubled school run.
A wall would also be erected to protect Protestant homes right on the sectarian interface.
However, Gerard McGuigan, a representative of the Ardoyne residents said they had no option but to reject the deal.
He said: "We don't want anything going across the road after what the children have been through which further isolates the school and increases tensions."
Mr McGuigan said all homes in the area were entitled to protection.
But he added: "We would rather sit down with those people, agree a situation that both communities can live with and try and build some trust, but that's not happening."
PA