`The last time I saw this man he was throwing grenades and shooting a pistol at us. Today he meets the Secretary of State.'

The last time I saw Michael Stone, in 1988, he was throwing fragmentation grenades and firing a Browning automatic pistol at a crowd of us at a republican funeral in Belfast's Milltown cemetery.

Yesterday he stood in the corridor of H-block number 8 in the Maze prison, evidently a more thoughtful man, and reflected: "It's all about dialogue and that's what we've been pushing. If we can get through the current situation, anything's possible."

Today Stone will be one of four Ulster Defence Association prisoners sitting across the table from Mo Mowlam, the Secretary of State for Northern Ireland, to tell her of their concerns about the peace process. The unprecedented meeting could be vital in helping persuade loyalists to maintain their three-year ceasefire.

Yesterday the signs were unexpectedly good. The four UDA leaders due to meet Ms Mowlam sat in one of their recreation rooms in the wing which they describe as home, and, far from being warlike, sounded relaxed, open- minded and keen to talk.

`Home' is a gaily-painted wing festooned with UDA and loyalist signs, flags and mottos. Men in casual clothes strolled along a central corridor, while others lounged in a kitchen and recreation room. From the background came the pounding of disco music. The cells are homely: prisoners can buy and bring in televisions and hi-fis, and many have wallpapered their cells. "This is where these blokes live," Martin Mogg, the governor, commented.

There is clearly a balance of power in operation here, for no prison officers were on the wing, staying on the other side of a set of bars. But there were two security cameras trained along the corridor, and when the governor ushered reporters into the wing his presence was affably accepted.

The authorities offered to bring in the media because they, the loyalists and IRA prisoners all feel aggrieved at newspaper stories suggesting that prisoners serving sentences for terrorist-type offences live a lie of Riley in the Maze.

It is indeed a most peculiar prison, but the governor, the UDA and the IRA all wanted to set the record straight. Asked if prisoners control the wings Mr Mogg answered: "Yes." They run their wings, he explained, while staff had control of everywhere else. Regular searches would be held, he said, and head counts were carried out twice a day.

He and the prisoners took exception to reports that drink and drugs are freely available, that sex takes place on visits, that prisoners have mobile phones, and that they can have cases of wine brought into the jail.

Sam McCrory, the UDA commander, said: "There's no booze, there's no drugs, there's no sex on the visits and we don't have guns. Drugs are totally out of the question. Anybody caught with drugs in any of the UDA wings will be expelled from the organisation and put out of these blocks.

"It's embarrassing and humiliating for our families when they read about sex on the visits, they're taking drugs, they're running about drunk. The majority of people in here are health and fitness fanatics so they're not going to take drugs. Half of them are on fat-free diets or they're vegans."

"Sex on the visits?" said Michael Stone: "I wish. What is it - a kiss and a cuddle with your wife or fiancee, that's all."

Over in an IRA H-block, some 12 sets of gates away, IRA officer commanding, Paudraig Wilson, said the same: "Most of what has been said is untrue and sheer fantasy. We are political prisoners and yes, this is a different prison from probably any other prison in the English system."

Martin Mogg said that while he could not guarantee that contraband such as drink and drugs were not smuggled in, the Maze had much less of a problem in these areas than many other prisons.

McCrory, heavily tattooed, explained life in the jail: "This prison works on a day to day system of cooperation with the management of the prison. We can ask for something and a PO (prison officer) will tell you no. So we ask to see a governor, and we'll sit down and we'll negotiate and we'll come to some sort of arrangement. You mightn't get what you want but you might get a piece of it.

"But you'll not do it without cooperation, you don't bully these people into it. We've been reading that staff feel under threat from us. Well, we've have had three football matches with the prison staff. And afterwards we went into the gym and we had crisps and coke and sandwiches and we all had a good laugh with each other."

The approach is different in the IRA H-block, which is more soberly decorated. On the walls are silhouettes of Che Guevara and some armed men, a notice about international women's year, a pro-Palestinian poster and Irish language material.

Wilson said that people complained about prisoners having access to computers, but said the two in the wing were needed for educational purposes: 50 republicans were doing Open University degrees, five working for master's degree and two studying for PhDs.

"We live in the real world - there have to be headcounts, there have to be searches," he added. Another IRA leader, Harry Maguire, added: "What we have here is a degree of progressivism, pragmatism and realism." A third, Jim McVeigh, said: "Unpalatable as it may seem, we are prisoners of war. We act as an army, as a disciplined group of men, in a very disciplined and determined manner."

Wilson was very open on the question of IRA escapes: "Unfortunately, from our point of view, since the big escape of 1983 we have only managed to get out one other prisoner, Liam Averill. We very much regret that we have not been able to secure the successful escape of larger numbers of republican prisoners. We see it as our duty."

Back in the UDA block, McCrory was clearly looking forward to meeting Ms Mowlam. "We've our own thoughts, she'll have her own thoughts, we'll get round a table," he said. "It's not a negotiation thing, it's a talk, a conversation and a listening exercise. From Sunday to now we have not stopped - meeting after meeting after meeting. We know the way forward is dialogue. We want a level playing field."