Final results from Wednesday's election confirmed what British officials had privately called their "nightmare scenario" with Ian Paisley's Democratic Unionist Party (DUP) emerging as the largest group in the legislature.
Among Catholic voters Sinn Fein, political ally of the Irish Republican Army guerrilla group, won favour over the moderate Social Democratic and Labour Party (SDLP), completing a sharp polarization of the political landscape in the British-ruled province.
London and Dublin had hoped a good showing for moderates would give fresh impetus to talks on restoring the assembly, suspended since October 2002 when allegations of IRA spying brought down the fragile power-sharing coalition.
Instead, the extremes of Protestant unionism, which wants to preserve Northern Ireland's political union with Britain, and Catholic nationalism, which seeks a united Ireland, are in the ascendant and a lengthy period of direct rule from London looms.
The assembly was set up under the 1998 Good Friday Agreement, which aimed to end three decades of political and sectarian violence in which more than 3,600 people died.
Paisley refuses to work with Sinn Fein, whom he calls "terrorists" and wants to re-negotiate the 1998 agreement he sees as giving too many concessions to Catholics.
Sinn Fein President Gerry Adam
has ensured his party's ascent
"We have to go back to the drawing board," the victorious DUP leader said. "The Good Friday agreement has been over for a long time."
But both Britain and Ireland were quick to rule out any renegotiation of the agreement.
"In our firm view, the Good Friday Agreement remains the only viable political framework that is capable of securing the support of both communities in Northern Ireland," the two governments said in a statement.
The result was a bitter defeat for former First Minister David Trimble, head of the moderate Ulster Unionist Party (UUP).
As London and Dublin digested the results, the Bush administration expressed concern about their impact on the peace deal the US helped to broker in 1998.
"Of course everybody is concerned," National Security Adviser Condoleezza Rice said.
Final results showed the DUP held 30 seats in the 108-member assembly, the UUP 27, Sinn Fein 24 and the SDLP 18.