The province's Crown energy corporation, Nalcor Energy, and Nova Scotia private utility Emera Inc. (TSX:EMA) were to have reached a deal to jointly fund the venture by Tuesday.
They had already extended an original deadline of Nov. 30.
In a joint news conference in St. John's with Emera president Chris Huskilson, Nalcor CEO Ed Martin said the two sides are close to an agreement to finalize a term sheet announced in November 2010.
More time is needed for internal reviews and due diligence, Martin said.
He referred to unspecified "new points" that have to be worked out between Nalcor and Emera, but said the $6.2-billion pricetag hasn't changed.
Martin said no new deadline would be set.
"We've learned from experience in these types of arrangements that a deadline won't be helpful to us at this point."
Huskilson stressed that the two sides are still working together.
"One of the reasons it was important for me to come here today was to make sure that people were absolutely clear on the fact that we're moving forward," he said. "And we're doing that in diligent fashion."
Martin would not offer a timeline for any deal, but Premier Kathy Dunderdale later told reporters she expects one before the spring session of the legislature ends in June.
Muskrat Falls is expected to dominate the sitting that starts in early March.
The Liberal Opposition says it wants a separate debate on Muskrat Falls based on final details reached between Emera and Nalcor, even if it means sitting into the summer.
Dunderdale, who leads a Tory majority government, said Friday there has already been extensive debate and public input on the project.
She also said this week that she expects to hear from Ottawa soon on a promised federal loan guarantee or equivalent that could shave hundreds of millions of dollars off borrowing costs.
Power harnessed from the lower Churchill River would reach Newfoundland and then Nova Scotia using subsea cables.
Critics raised doubts about the project after Nalcor and Emera missed the November deadline. They also quote the findings of a joint federal-provincial environmental review panel that found proof lacking for both the need and viability of the project.
The panel urged Newfoundland and Labrador to consider alternatives.
Another missed Muskrat Falls deadline gave the political opposition fresh fodder.
"That is probably the wisest decision they've made to date — not to set any more deadlines," said NDP Leader Lorraine Michael.
"It says to me that there's a lot more to this project than they've been letting on."
Both Michael and Liberal natural resources critic Yvonne Jones said if Nalcor and Emera get more time, then the provincial Public Utilities Board should be allowed a requested extension for its own review of Muskrat Falls.
Dunderdale says the board must report by March 31.
Board chairman Andy Wells has described efforts to get information from Nalcor as "torturous," although the Crown corporation says it has co-operated.
Dunderdale said the term sheet process is long and tedious, while the utilities board has been asked a specific question: whether Muskrat Falls is the least-cost power option.
The premier and Nalcor say years of research back up their claim that the answer is yes. A report in September by global energy analyst Navigant Consulting, which critics said was based on Nalcor's own data, agreed.
An independent assessment by Manitoba Hydro International is expected as early as next week, Dunderdale said Friday.
"This is a big, complicated project," she said. Delays have occurred "on every major project that has ever happened in this province."
Under the term sheet, Emera would fund a 180-kilometre subsea link between Cape Ray, N.L., and Lingan, N.S., at a cost of $1.2 billion.
A further $2.1 billion would be spent to build a transmission link from Labrador to Newfoundland, $600 million of which would be provided by Emera.
Nalcor would spend $2.9 billion to build a power generating facility at Muskrat Falls on Labrador's lower Churchill River capable of producing 824 megawatts of electricity.
Nova Scotia would get 170 megawatts of energy a year, about 10 per cent of the province's total energy needs, for 35 years.