Inside Story: Northern Ireland; As the Troubles return to Ulster, Paul Routledge and Stephen Castle ask: what chance for peace now?
Seven months ago, at what may turn out to have been the high water mark of the 1990s peace process, President Bill Clinton strode in triumph through a joyful Belfast and told the people of Northern Ireland: "You must not allow the ship of peace to sink on the rocks of old habits and hard grudges."

Now, after an extraordinary week of old habits and hard grudges, the guns are out again in the province and the ship is surely sinking. In the words of Gerry Adams, the peace process is "in absolute ruins". Others with long memories of the Troubles talk grimly of "another 25 years". Sources with access to IRA thinking claim the Provos are planning a military campaign lasting four or five years.

Something may yet be salvaged from the mess, but after a loyalist insurrection and a nationalist backlash, no one can now see a way forward. Are we back in 1985? Or is it 1974? Or even 1969? Or, they might ask in despair, have we simply never left 1690?

On Friday, the Unionists celebrated the 306th anniversary of the Battle of the Boyne in their most triumphal manner for years. After a decade of concessions to Sinn Fein and Dublin - as they see it - they finally had something to cheer about. The victory of the Orange Order in overturning a police ban on parading through a nationalist area of Portadown has dramatically revived the spirits of the majority. You could read it in their faces, fixed in a "Gotcha!" grin. They are back where they like to be, where they think destiny has brought them: on top, in charge, no concessions.

As for the minority, they are also somewhere familiar: defeated, furious with the RUC, furious with the British government and so outraged with the failure of constitutional politics that mobs in the streets have been calling on the IRA for war.

IT HAPPENED with a crushing inevitability, as if in slow motion. Everyone has known since last summer that David Trimble, having won the Unionist Party leadership by riding the Orange tiger at Portadown, would have to repeat the performance this year, with all that meant in terms of public order. As one source in London put it: "It's in his constituency; he's a member of the Orange Lodge; he's the leader of the Ulster Unionists. He had no choice. If he had stayed away Ian Paisley would have grabbed the limelight." In Belfast someone remarked: "The dogs in the street knew the Orangemen would walk Garvaghy Road."

A little more than two weeks ago Mr Trimble himself approached Sir Patrick Mayhew, the Secretary of State for Northern Ireland, warning that the march threatened to develop once again into a stand-off, and appealing for him to intervene. Sir Patrick declined and Sir Hugh Annesley, the RUC Chief Constable, ruled that because of the danger of violence the Orangemen could not follow their chosen route.

By last Tuesday, the predicted impasse had begun in Portadown and Mr Trimble took his case to John Major, this time in company with the other leading unionists: Mr Paisley, the Rev Martin Smyth and Robert McCartney. They asked the Prime Minister to overrule the Chief Constable and let the marchers through. Although Mr Trimble publicly referred to the meeting as constructive, in fact he got nothing. At that stage Sir Patrick believed that a negotiated deal might be possible.

But there was no deal; instead, seething trouble turned into widespread violence. Protestant protesters blocked main roads right across the province. An airport was blockaded. They torched properties, driving Catholic families from their homes in a chilling replay of 1969. They threatened to turn up in their thousands to confront the police at Portadown.

Friday would be the Twelfth, the ultimate day of Orange celebration and a public holiday in Northern Ireland. On Thursday the Chief Constable reversed his decision and allowed the march, his men roughly ejecting Catholic protesters from the path of the Orangemen.

Loyalist fury instantly became nationalist fury. Cardinal Cahal Daly, the Roman Catholic Primate, summed up the feelings: "It is intolerable to see the forces of the state capitulating to mob violence and the threat of violence." The Irish Prime Minister, John Bruton, denounced what he described as "a yielding to pressure".

There followed an explosion in Catholic Northern Ireland and places such as Londonderry and Strabane, which have seen little or no rioting in recent years, were suddenly in flames. There were petrol bombs, bricks and the occasional shooting. By last night, one man had died.

Why did Sir Hugh change his mind? In law and order terms, perhaps, the climbdown was understandable. What is unclear is why it took five days to come, five days in which the emotional and political stakes rose so high that a nationalist backlash was inevitable, five days in which what survives of the peace process was brought to the point of extinction.

Many in the province believe that this was a failure as significant as the capitulation of the Wilson government in the face of the loyalist strikes of 1974. That spelt the end of Northern Ireland's only experiment in power-sharing government and ushered in a decade of complete political stalemate. Critics of the Government draw a contrast with the events of 1985-87, when no concessions were made to Unionist outrage and protest over the Anglo-Irish Agreement.

Sir Hugh insists that he had no choice and that he acted to save lives. Sir Patrick remains adamant that the decisions were not his, that he was kept closely informed but did not intervene and order Sir Hugh to change his mind. Those close to the Northern Ireland Secretary say he took a legalistic view at every stage, arguing that if he became involved it would set a dangerous precedent.

Mitchell McLaughlin of Sinn Fein says that what took place last week "was virtually a political coup d'etat by the Unionist party, using the muscle of the Orange Order. This was organised and planned by the Unionists. We must ask was there a revolt within the RUC? The Orange Order could set up checkpoints, close roads and close airports while the RUC simply stood by. I believe the coup extended into the ranks of the RUC and that was what precipitated Annesley's collapse."

AT THE very centre of these events was David Trimble, clad in his Orange sash, running hither and thither in the sunshine. He naturally denied that this had been a peace-wrecking exercise. "There was a general mood in the unionist community that was fed up with continuing concessions made to Sinn Fein-IRA despite the breakdown of the ceasefire. If the Orange Order had caved in there would not have been peace. We would have been in far worse problems. The Orange Order ... provided stability and discipline."

Mr Trimble has shored up hardline support and averted the eternal Unionist nightmare of being "out-oranged" by those, such as Ian Paisley, who present themselves as more loyalist. He may also have done something to secure his personal position, which after an unsteady first year as leader was anything but safe.

His election last September - pointedly after marching with the Orange Order in Portadown in July 1995 - reflected a rightward drift within the Ulster Unionist Party. To many of those backers he has failed to deliver. As a result, Mr Trimble has found himself exposed at several key points in the peace process, with Mr Paisley ever willing to paint the Ulster Unionists as the party of the sell-out.

His one big move in the past year backfired. It was Mr Trimble who demanded elections in Northern Ireland before all-party talks could begin, but when Mr Major agreed, he did not accept Mr Trimble's preferred electoral system. As a result - or at least partly so, it was Sinn Fein and the Paisley party that came out of the ballot best.

Worse, in Westminster terms at least, was a crucial loss of influence with the Conservatives. When John Major survived the Scott report vote earlier this year in the Commons, it was not the Ulster Unionists who saved him - they split - but Mr Paisley's DUP.

Before last week, Unionist disaffection was growing - and the parliamentary party was never exactly a hotbed of loyalty. According to two reliable sources, none of the party's MPs voted for Mr Trimble in last year's leadership contest, which was decided by an electoral college. And at least three of them see themselves as potential leaders: John Taylor, Ken Maginnis and Willie Ross. With talk of a possible challenge to Mr Trimble in the air, a demonstration of toughness was in order. As one observer put it after the Portadown climbdown last week: "Trimble needed something like this."

Paul Bew, Professor of Irish Politics at Queen's University, Belfast, agrees that Mr Trimble has strengthened his position with the loyalist grass roots. But he prefers to look more positively on the outcome. "He now has more capacity to sell a settlement than he had before. That is where Drumcree leaves him. It is one of the few slender shafts of light coming out of this situation."

The resurgence of Orangeism, too, should not be exaggerated, he says. "Orangeism has lost its hegemony in society. It is a force of resistance rather than a force of domination. It is reasserting its strength but its role is strictly limited."

ON THE other side of the divide, Sinn Fein strategists believe they face an utterly changed situation. For Gerry Adams, this has been a humiliation almost as great as the Docklands and Manchester bombings. When he and his cohorts toured the nationalist areas of Belfast appealing for calm and restraint, they were received with jeers in their own heartland. There were even calls for the IRA to "go back to work".

A senior aide to Mr Adams admitted: "All of this makes it more difficult for us. But what do we do? Give up and walk away? Or try harder? We have to try harder. Annesley and Mayhew can go back to England. We have to go back to the Falls."

Other observers say that a breakdown of law and order triggered by the loyalists presents the IRA with the best propaganda opportunity they could wish for to resume "the armed struggle". "From the Provo hawk point of view, these are the best possible conditions for a return to the conflict," said one source.

John Hume, the SDLP leader, is also on the defensive, faced by a surge of sectarianism in both communities. As one nationalist put it: "Trimble and his people have been the best possible recruiting sergeants for the Sinn-ers." Dublin is angry, and at Westminster the Labour Party is critical of the handling of the march, departing from its bi-partisan support of government policy on Northern Ireland.

The prospects for the peace process - talks reconvene on Tuesday at Stormont - look bleak. The Unionists, who boycotted the peace process during the Portadown stand-off last week, can be expected to attend and the SDLP has been careful not to threaten withdrawal.

Preliminary negotiations are due to resume on Tuesday but will adjourn at the end of the week until September. "It is crucial that these talks restart," says Professor Bew, "and that the Unionists strike a conciliatory note. The political classes have got to pull us back from the brink. It is going to be very hard, but what is the alternative? Everyone knows what the broad outlines of the only possible compromise are. We must move towards that."

But even before last week there was widespread scepticism about the usefulness of talks without Sinn Fein. Now things are far worse, and at the very best a long haul lies ahead. As one senior MP said, when asked about the talks: "If they were going at snail's pace before this, they'll be going slower now."

LAST WEEK was the week when old habits and hard grudges had their say. When Bill Clinton visited Northern Ireland and the crowds turned out to cheer, the world was left with an impression of a mass of people hungry for peace but frustrated by stubborn, short-sighted leaders. Now there is mayhem on the streets and the political leaders - even Mr Trimble and Mr Adams - are aghast at the strength of popular feeling. This weekend the population is as polarised as it ever was. The American reporter in Belfast seemed to sum it up when he said wearily that this was "the old story".