Blair and Ahern remain optimistic about the 'dramatic' peace deal that almost was

A hugely ambitious blueprint for a new era in Northern Ireland - in which Irish republicans would sit in government with the Rev Ian Paisley - was put on show in Belfast yesterday as the deal that almost was.

A hugely ambitious blueprint for a new era in Northern Ireland - in which Irish republicans would sit in government with the Rev Ian Paisley - was put on show in Belfast yesterday as the deal that almost was.

The comprehensive new deal was presented by Tony Blair and his Irish counterpart, Bertie Ahern, as tantalisingly close, but temporarily stalled on the issue of arms decommissioning.

The two prime ministers pointed to the IRA's refusal to permit photographs of its arsenal being decommissioned as the remaining obstacle to a breakthrough that would remove the guns and install a new coalition government.

Different versions of the negotiations came from the two sides. The Democratic Unionist Party leader maintained photographic evidence of decommissioning had not been ruled out until the last moment. But Sinn Fein insisted the Government had been informed months ago it was "an impossible and unrealisable demand".

Mr Adams said Sinn Fein had been surprised when mention of photography was made in a draft report on 17 November. "We made it clear then that this wasn't a runner. In fact we asked the governments to take it out of their draft outlines. They explained to us there was no other way of getting the DUP to look at this."

The breakdown of the talks following months of intensive negotiations was followed by verbal recriminations, but it was noted that neither Mr Paisley nor Sinn Fein had slammed any doors on doing business in the future.

This gave credibility to the statements from both prime ministers that an agreement remains within reach. Mr Blair said there was "a sense of inevitability" about an eventual breakthrough.

Mr Ahern said they had achieved "a dramatic surge towards final closure," adding: "I would like to see it finished before Christmas and I still believe that's possible."

Most observers doubt such a quick turnaround is possible, and some believe a breakthrough may have to wait until after the next general election.

The document released yesterday lacks full and formal agreement from the two parties, especially on the photography point. But Mr Blair listed its achievements as "an end to paramilitary activity, powersharing, the setting up of an executive, and all the changes you need for the DUP to sit in the executive with Sinn Fein". The two governments refrained yesterday from getting involved in a blame game. The key question now is whether this substantial but tentative agreement can be held together without unravelling in the weeks ahead.

The document set out an intricate choreography for the next few months. Had agreement been reached, the IRA would have committed itself to full decommissioning, while Sinn Fein would have moved towards involving itself in policing arrangements.

The DUP would meanwhile have accepted republicans as proper partners in a new administration which would have a DUP first minister working with a Sinn Fein deputy. Policing would be eventually devolved to the new government, which would come into operation by next spring.

Mr Blair said: "I think there is an inevitability about this process which is locked in. I can't see this process going backward but I do know that it's going to require extra effort to finish the journey.

"This is a transformed landscape in which we operate today but it won't be properly transformed until we have the devolved institutions back up and working again."

Mr Ahern added: "Today is truly different - I don't think it, I know it. We had obviously wished to be able to present the proposals in the context of full agreement before we came here - but that is not possible.

"We are not quite at that point of total success. Our work must therefore continue to secure agreement and closure and what - by any standards - is a huge, impressive, indeed a landmark package."

Mr Paisley declared: "The IRA can't have a veto in Northern Ireland and they are not going to have a veto in Northern Ireland. If you look at the papers that have been supplied to you today, you will find that the photographs are mentioned. Hence Mr Adams was trying to give some hazy explanation why that was in."