The secretary of state for Northern Ireland has said “serious consideration” should be given to the re-establishment of a body along the lines of the Independent Monitoring Commission (IMC).

Northern Ireland secretary Theresa Villiers made the comments while speaking to the House of Commons about the political situation in Northern Ireland.

She said Northern Ireland’s devolved institutions are “looking increasingly dysfunctional” in the aftermath of a row over the alleged continued activity of paramilitary organisations.

The IMC, which existed between 2004-11, monitored the activity of paramilitary groups in Northern Ireland and handled claims from political parties who believed other parties were not committed to the peace process.

Its activity was regularly criticised by Sinn Féin, which believed the IMC was neither independent nor impartial.

In 2003, the IMC was accused by Sinn Féin’s Dáil leader of “undermining the Good Friday Agreement”, and the party moved in 2006 to repeal Irish legislation supporting its establishment.

Re-establishing a body along the lines of the IMC could draw ire from the nationalist party, which has the second-largest number of seats in the Northern Ireland Assembly and plays a leading role in the Northern Ireland Executive.

Speaking to the House of Commons today, Ms Villiers said: “The Government is clear that paramilitary organisations have no place in a democratic society.

“They were never justified in the past, they are not justified now, and we all need to work together to find a way to bring to an end this continuing blight on Northern Ireland society.

“The Government is working with the parties on how to achieve that goal.

“For example, serious consideration needs to be given to whether the time is right to re-establish a body along the lines of the Independent Monitoring Commission.

“The remit the parties might wish to give to such a body is likely to be different from those addressed by the original IMC, reflecting changed circumstances.

“But there might well be scope for such a body to play a part in providing greater community confidence and repairing working relationships within the Executive.”