The Washington handshake heard all around the House

John Major and junior Northern Ireland ministers yesterday defended Sir Patrick Mayhew's handshake meeting with Gerry Adams as necessary to impress on the Sinn Fein president that peace had to be founded on a decommissioning of IRA weapons.

The Prime Minister told the Commons: "Until in these exploratory talks there has been practical movements forward in the decommissioning of arms, it will not be possible for Sinn Fein to move forward to full-scale political talks, either with the Government or, I suspect ... with any political party in Northern Ireland.

"Our objective is to move towards taking the gun out of the politics of Northern Ireland."

The Secretary of State's attendance at the Washington summit on the economic future of the province meant he missed Northern Ireland Questions and the criticism heaped on his session with Mr Adams.

Nicholas Winterton, MP for Macclesfield, said Tories like himself deeply regretted the meeting. "This gives credibility to Mr Adams and his cause which is totally unjustified."

The Government must make no further concessions to "republican terrorism" and there must be substantial decommissioning of IRA weapons, Mr Winterton demanded.

Making the same point in his measured way, James Molyneaux, leader of the Ulster Unionists, said the IRA had halted only one aspect of terrorism. "They have actually increased their criminal activities, including murder very recently, and also continued the very worrying feature of targeting police families and public figures."

Ministers would have the backing of the entire community for demanding that the IRA "end their terrorism and set about deactivating their hideous terrorist apparatus," Mr Molyneaux said.

His colleague Ken Maginnis, MP for Fermanagh and South Tyrone, focused on Minister of State Michael Ancram and the talks he has been conducting with Sinn Fein.

"Although every demand by Sinn Fein-IRA as to who they will meet and when they will meet them has been met so far, not a single solitary gun has been produced." Nor had the method of disarmament been discussed. On the other hand progress had been made with the Loyalist paramilitaries.

"Mr Ancram's dalliance with Sinn Fein-IRA is becoming a sordid little affair."

The minister told the House he was "not in the business of either alienating or appeasing". He was seeking to build on the cessation of violence to try to ensure through exploratory dialogue the beginning of a genuine decommissioning of illegally-held arms.

But, raising the Washington meeting with the Prime Minister, Ian Paisley declared that Mr Adams had said there could be no progress towards decommissioning by everyone. "That is a surrender of arms by army and by police and by those who have guns to protect themselves, and also that all prisoners must be released," said Rev Paisley, leader of the Democratic Unionists.

Jumping from one end of the national pay league to the other in the space of five minutes, Mr Major defended the use of transfer of shares worth a potential pounds 650,000 to the wives of National Grid directors, but urged nurses to "set aside the language of trade union confrontation" in pursuit of a 3 per cent across-the-board claim.

Tony Blair said the privatised National Grid had admitted that the four directors transferred the shares "to avoid paying income tax".

"Why doesn't the Prime Minister stop defending the greed of a prvileged few and stand up for the vast majority of decent British people?" the Labour leader demanded as he pressed Mr Major three times on the issue.

It was first raised by Labour's Kate Hoey who asked what message the affair gave to pensioners in her Vauxhall constituency "struggling to make ends meet". But Mr Major said he had made inquiries and understood the only share options granted by National Grid had been to its own directors and staff.

"Having exercised those options and purchased the shares, directors have then given shares to their wives."[David Jefferies, National Grid chairman, registered almost 59,000 shares with a potential profit yield of pounds 330,000 in the name of his wife, Jeanette.]

"It is a fundamental principle that transfers of property between husband and wife are free of tax, and have been for a long time," Mr Major said. Was Labour saying such transfers should be taxable?

Dismissing the suggestion, Mr Blair said the issue was not whether share options were right or wrong but whether they were taxed as income or as capital gains. Was Mr Major prepared to put a stop to the tax loophole?

Rather as the pot calls the kettle black, the Prime Minister accused Mr Blair of "wriggling" and said the reality was that Labour hated privatisation.