Adams bargains for IRA jail amnesty: Sinn Fein leader tries to drive wedge between Dublin and London over terrorists' release

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GERRY ADAMS raised the stakes yesterday for a negotiated peace settlement in Northern Ireland by demanding the release of IRA prisoners from British and Irish jails.

The Sinn Fein president's move, after Downing Street ruled out an amnesty, was seen as an attempt to embarrass John Major. Albert Reynolds, the Irish Prime Minister, has said the issue could be raised in exploratory talks once the violence had stopped.

In a statement, Mr Adams said: 'The issue of political prisoners has been raised by Mr Reynolds. A negotiated settlement will remove the symptoms as well as the causes of the conflict. As part of this, it is obvious that all prisoners must be released.'

Although irritating Downing Street, it was not regarded as an insurmountable obstacle to peace. British sources were careful to leave open the release option as part of a normal review of sentences, if the IRA agrees a ceasefire.

About 400 of the 1,600 republicans and loyalists serving sentences for terrorist-related offences are due for annual Christmas leave this week.

Michael Mates, a former Ulster security minister, said the commuting of life sentences to shorter sentences 'happens all the time . . .' He added: 'Absolutely no to an amnesty in return for an end of terrorism . . . When it does (end), many things will be possible.'

British ministers still hope the IRA will respond positively in the new year to the two governments' Downing Street declaration.

However, the IRA has issued two conditions for halting violence, both known to be unacceptable. Earlier, Mr Adams said Britain would have to drop its neutral stance to become a 'persuader' against the Ulster Unionists.

Unionists would withdraw their 'tentative approval' of the declaration if the Government conceded an amnesty, said one Ulster Unionist MP. But James Molyneaux, Ulster Unionist Party leader, played down the anger felt by many, saying he was reassured by the British assertion that there would be no halt to prosecutions, and no amnesty.

Mr Adams' statement was responding to a warning from Mr Reynolds at the weekend that if the IRA rejected the peace initiative to bring Sinn Fein into the talks, the two governments would crack down on cross-border security.

Mr Adams said: 'The issuing of ultimatums by London and Dublin while we are considering their document is most unhelpful . . . Sinn Fein is committed to building a peace process in our country and has been doing so for some time . . . It is important if we are to move towards a durable settlement that the core issues are not obscured in the current frenzy of speculation and rumour.'

Downing Street denied a rift between London and Dublin over the substance of Mr Reynolds' remarks. But there was little doubt London was irritated at the way he allowed Mr Adams to exploit them.

The European Union yesterday held out the promise of more financial assistance, foreign ministers saying: 'The ending of the painful and bitter conflict . . . would bring many social and economic benefits to the region.'