Direct rule was established when the British Government intervened in Northern Ireland due to rampant violence and political instability that marked the Troubles. The Northern Ireland Parliament, unable to manage the growing sectarian tensions between the unionist and nationalist communities, faced increasing criticism and demands for more effective governance. The situation deteriorated significantly in the late 1960s and early 1970s, culminating in widespread riots, civil rights marches, and incidents of violence, including the notorious Bloody Sunday in January 1972.

In response to the escalating crisis, Prime Minister Edward Heath's Conservative government decided to suspend the Parliament and take control directly from Westminster. This marked a significant shift in how Northern Ireland was governed; it meant that policies would be made directly by British ministers rather than local representatives. Edward Heath appointed a new Secretary of State for Northern Ireland, William Whitelaw, to oversee the administration during this challenging time. The intent was to restore order, begin dialogue between conflicting parties, and address the complex societal issues through British legislation.

The introduction of direct rule also paved the way for new talks regarding future governance and eventually led to the establishment of various peace processes aimed at resolving the conflict. However, this approach did not immediately calm tensions, as various paramilitary groups intensified their activities in response to British authority. The long-term implications involved an ongoing struggle for rights and representation by different communities in Northern Ireland, ultimately leading to further political developments and the eventual Good Friday Agreement in 1998.