Certain embodiments of the invention may be found in a method and system for handling deadlock conditions in a data processing system. Aspects of the method may comprise identifying a potential deadlock state in a distribute and merge data processing system. An actual deadlock state may be detected once the potential deadlock state is identified. The detected actual deadlock state may be indicated by generating a signal. The method may comprise initiating recovery from deadlock conditions by generating at least one signal that indicates when data is accepted in response to the indication of the actual deadlock state.