By Conor Humphries and Amanda Ferguson
DUBLIN/BELFAST (Reuters) - Ireland fears British Prime Minister Theresa May's call for an early general election in June could damage chances of resolving the political crisis in Northern Ireland, the Irish Republic's foreign minister said on Tuesday.
May's government last week extended a deadline for Irish nationalists and pro-British unionists to form a new devolved administration in Northern Ireland to avoid choosing between a third election in the British province in 12 months and re-imposing direct rule from London for the first time in a decade.
But May's decision to seek a national election on June 8 could distract the parties, Irish Foreign Minister Charlie Flanagan said, echoing concerns voiced by several members of the Northern Ireland assembly.
"I am of course concerned about the impact of a UK general election on the ongoing talks' process," he said in a statement.
"I am conscious of the political reality that all of the parties involved in the talks will now be competing in a general election and mind-sets will inevitably shift to campaign mode."
May's Northern Ireland minister, James Brokenshire, said the election would not change London's approach to the province and there was still a chance to reach agreement on forming a new power-sharing government before a deadline at the start of May.
Some commentators suggested the June 8 election could reduce resistance to regional elections. Figures in both of the two largest parties, Irish nationalist Sinn Fein and the Democratic Unionist Party, have said they believe they could improve their share of the vote in a fresh election.
The Belfast government collapsed in January when Sinn Fein withdrew over a heating subsidy scandal. That triggered an election on March 2 that ended the majority pro-British unionists had enjoyed for nearly a century.
Over a month of talks since then have shown little sign of securing a new power-sharing pact of the sort mandated by the 1998 Good Friday Agreement that ended decades of sectarian violence between Catholic nationalists and Protestant unionists.
Brokenshire confirmed on Tuesday that the British government would legislate to set local tax rates for homes and businesses in Northern Ireland but was still seeking a political accord and that talks had identified possible areas of consensus.
While no one is forecasting the political impasse will bring on a relapse into the bloodshed that killed 3,600 people over three decades, it could increase sectarian tensions and freeze decision-making as Britain prepares to exit the European Union.
As the only part of the United Kingdom with a land border with the EU, Northern Ireland faces severe disruption to its economy from a "hard Brexit". Any sign of border controls could inflame Irish nationalists who seek a united Ireland.
(Reporting by Conor Humphries and Amanda Ferguson; editing by Mark Heinrich)