Alliance leader David Ford told UTV his party won't nominate a candidate for the post of justice minister before the deadline, but denied the move will "spark a crisis".
Last week, the First Minister Peter Robinson and Mr McGuinness wrote to party leaders at the Assembly asking them to select their preferred candidate for the future role of
Justice Minister.
But only the SDLP observed Friday's deadline for a response, identifying Margaret Ritchie as their option.
After the DUP and Sinn Fein agreed they would not seek the new ministry, it was expected that the Alliance Party would eventually emerge as the only option likely to secure both unionist and nationalist support.
But Mr Ford told UTV he had written to Mr Robinson and Mr McGuinness to explain his party won't nominate a candidate unless a policy programme for the Justice Ministry was set out.
"There has been no progress", he told UTV Live.
"There's no point in having devolution of justice unless we have policies agreed."
"We also believe we need to see real movement forward towards building a shared future."
"People want to see the justice agencies working well under local leadership. That means there needs to be agreement.
"We can't just pin a rosette on somebody and say they're now the minister and put them at the back of a chauffeur-driven car and say that all is well. We really need delivery," Mr Ford added.
The UUP has also refused to propose a candidate for the new ministry.
Meanwhile Sinn Fein said it has held further talks with the Irish government.
Deputy First Minister Martin McGuinness met Foreign Affairs Minister Micheal Martin in Co Louth on Thursday night for discussions.
The talks came ahead of a meeting of the North-South Ministerial Council on Monday when Taoiseach Brian Cowen is scheduled to lead an Irish government delegation in the discussions with Northern Ireland ministers.
© UTV News