The Sinn Fein president Gerry Adams emerged from a two-hour meeting with the Prime Minister, saying the process was in "real trouble". The Unionists accused Sinn Fein of "leading them up the garden path".
The cause of the fresh crisis was the IRA's statement bluntly refusing to disarm if the peace process was turned into an IRA surrender. The Prime Minister was angered by the IRA's veiled threats that it would end the two-year ceasefire unless Sinn Fein was given a share of power before the end of the deadline for the peace process, in May next year.
In a private meeting with David Trimble, the Ulster Unionist leader, Mr Blair is said to have told him: "I will take no threats from the IRA." Mr Trimble said Mr Blair intended to give that message to Mr Adams.
The Sinn Fein president and his negotiating team emerged grim-faced after their meeting, which overran by an hour.
Mr Adams said bluntly: "We are in real trouble here, let nobody be in any doubt about that." He added: "The man who holds the key - and this is the best opportunity for peace this century - is your Prime Minister. I know he has done quite a lot but is he going to allow the Unionists a veto?
"Let us not under-estimate the seriousness of the situation we are in."
The Sinn Fein chief negotiator, Martin McGuinness, added: "Unless the Unionists and the British Government play their part within this process, in my opinion there is no prospect whatever of the armed groups decommissioning before [the deadline] next May." Their remarks were seen by Downing Street as hard bargaining but significantly, they had refused to rule out the possibility of the process being salvaged.
Mr Trimble, emerging from an earlier meeting with the Prime Minister, said the IRA statement challenged Mr Blair's assessment last week that there had been "historic seismic shifts" in the republican movement. "They have led us up the garden path," said the Ulster Unionist leader. "There is a very serious question in our minds as to whether Mr McGuinness and the movement were ever genuine about this process.
"They accepted an obligation to achieve total disarmament, they have done absolutely nothing about it."
Mo Mowlam, the Northern Ireland Secretary, who was in the US, said the statement had been "unhelpful" and it threatened to undermine the efforts of the former US senator, George Mitchell, to ease the Unionists and Sinn Fein out of their entrenched positions.
Mr Mitchell, who has been asked to review the peace process for the Dublin and London governments, was determined yesterday to remain optimistic. He said he believed the Good Friday Agreementcould be salvaged but warned the problems in Northern Ireland would not be resolved by threats of violence.
Mr Mitchell said after meeting the parties in Belfast they would return for more talks on 6 September, when he hoped to wrap up the review of the process instigated by the two governments "promptly", although he set no deadline.
The Alliance party leader, Sean Neeson, who met Sinn Fein's Francie Molloy and Michelle Gildernew at Stormont, said the IRA statement was "unnecessary and unhelpful". "We stressed that decommissioning was an integral part of the process," Mr Neeson said.
Downing Street insisted Mr Blair's meeting with Mr Adams had been "useful and constructive". In a statement, the Prime Minister's official spokesman said: "The Prime Minister remains absolutely committed to implementing the Good Friday Agreement and making the peace process work. Despite all the difficulties, the process is still there are still moving forward.
"The two problems outstanding remain the same as they were - the establishment of an executive and the issue of decommissioning and they will be addressed in the review."Reuse content