Plenty of talk but still no handshake for Adams at No 10

Downing Street had privately indicated to Sinn Fein in advance of yesterday's meeting that Mr Blair might have been prepared to be seen shaking Mr Adams by the hand for the first time in front of cameras following the IRA statement last week ordering volunteers to lay down arms. However, Mr Blair held back after criticism by loyalists that the Government was conceding too much to republicans having announced the Royal Irish Regiment was being disbanded. When Mr Adams, flanked by Martin McGuinness and senior members of Sinn Fein, walked into the entrance hall at No 10, Mr Blair stood rather stiffly in front of the cameras with his hands by his sides. Mr Adams posed for the cameras with his hands crossed, before they went in to more than an hour of talks.

The meeting was aimed at regaining momentum following the impasse that has led to the continued suspension of the power-sharing executive in Belfast. There was a handshake by Mr Blair for Ian Paisley, the leader of the hardline DUP, but no sign of movement by the Unionists.

Mr Paisley, who would become first minister in a devolved power-sharing executive, if the two sides could agree on it being reformed, accused the Government of having "caved in" to the IRA. He said it had given "concession after concession" even though there was no proof that the organisation intended to give up its armed struggle. "We are not going to have any discussions about devolution until the requirements Mr Blair set out are fulfilled by the IRA," he said.

Rejecting his criticism, Mr Blair said the dismantling of army observation towers and the reduction in forces in Ulster was "a natural outcome of the fact that the threat has changed". "These are things that are justified and actually have been justified for some time in security terms. With the IRA's statement we can implement that but that has not been forced politically against the security wishes of the police or the Army," he said.

But he said that the process would only work "if all the key partners in the process decide they are going to work together", emphasising that Sinn Fein could only return to power-sharing government so long as it was committed to exclusively peaceful and democratic means.

The Prime Minister, however, insisted that the IRA's announcement had not changed the basis of the peace process. In return for adoption by all parties and all people - particularly republicans - of exclusively democratic means, there could be power-sharing, he said. "You cannot have the institutions in Northern Ireland back up and running except on the basis that it is clear in word and in deed that exclusively peaceful means are the only way to achieve progress."

Mr Adams accused Mr Paisley of "playing for time". He added: "If Ian Paisley isn't going to share power with the rest of us, then we have to move on without him."