Mr Blair welcomed the clarity of the statement yesterday and said it came after years of "false dawns" for peace. The Prime Minister said: "The statement is of a different order than anything before. It is what we have striven for and worked for throughout the eight years since the Good Friday Agreement. It creates the circumstances in which the institutions can be revived."
But it was met with caution by opposition leaders and the Secretary of State for Northern Ireland, Peter Hain, who told The Independent last night: " We have a long way to go before a political settlement."
The statement came after months of carefully choreographed moves by the Government, culminating in the release of the IRA bomber Sean Kelly on Wednesday night. Mr Hain revealed that Jonathan Powell, the Prime Minister's chief of staff, and a former diplomat had played a vital role in securing the IRA statement. "Jonathan Powell is an absolutely pivotal figure in all of this. Not in front of the cameras, but in terms of his grasp of the detail and his credibility as an interlocutor in helping to create circumstances in which myself as Secretary of State and the Prime Minister can engage in the right way," Mr Hain said.
The final stage of the deal was thrashed out in five hours of talks between Gerry Adams, the Sinn Fein president, and the Northern Ireland Secretary at Hillsborough Castle in Northern Ireland on Wednesday night, as Sinn Fein's chief negotiator, Martin McGuinness, flew to meet supporters in the United States.
Mr Hain said Ian Paisley, leader of the hardline Democratic Unionist Party "has it in his hands to become the First Minister of a reconstituted Northern Ireland executive and assembly in the best circumstances for any Unionist leader to do this, which is with IRA activity shut down. There is a long way to go to achieve that."
Mr Hain will introduce a Bill in the autumn to fulfil other parts of the deal with the IRA, including an amnesty for IRA men who have been on the run since committing crimes for which they have not been brought to court.
One senior minister admitted last night that the release of Mr Kelly and other concessions, including the amnesty for the fugitives were difficult to stomach. "This is going to be bad for the families of the victims, but we have to bite our tongues," he said.
Mr Hain said his decision to release Mr Kelly was controversial, but he said it carried a "blunt warning" to IRA members that if they returned to violence, their licence for release could be withdrawn.
"People attacked me strongly for revoking his licence six weeks ago. It was a tough decision. I hope it will be a one-off. But there's a blunt warning that if anybody does behave in a way that breaches their licence I will not hesitate to act and the fact that I was prepared to do so, demonstrates that fact," he said.
"But the context for that decision had been completely changed by the IRA statement and therefore in those circumstances I thought it right to temporarily let him out pending the decision of the sentence review commission."
Sir John Major, the former Tory prime minister, who secured the Downing Street Declaration, said last night he had used a "secret channel - an individual" to negotiate with the IRA, but when the IRA set off the Warrington bomb that "murdered those little boys - that was the moment when I was very tempted to pull the plug on the peace process, but decided against". He added: "Step by step, the Northern Ireland bank raid, their credibility was being shredded. I am not being mealy mouthed. I welcome this statement unreservedly, but I think it was coming because their base was crumbling."
The Liberal Democrat leader, Charles Kennedy, said: "The Northern Irish authorities should build on the momentum of this announcement to spur forward the peace process. However, the IRA must ensure their deeds do indeed match their words.''
David Lidington MP, shadow Northern Ireland Secretary, said: "All paramilitary and other criminal activities ... must end for good. Republicans must accept the legitimacy of the police and criminal justice systems, North and South, and encourage full co-operation with them."
Voices of the people
Colin Parry, father of the Warrington bomb victim, Tim
Obviously I welcome it, like I'm sure any right-thinking person would. It has been 30-odd years of bloodshed and pain and suffering for many people like me, which will with any luck, be behind us: certainly in the political sense it will be behind us anyway.
William Frazer, 45, from South Armagh, who lost five of his family, including his father, shot in 1975
Unfortunately, we see nothing here new. The wording has been changed slightly but if you hunt out the old IRA statements over the past 80 years, they are very similar. My uncles, friends, neighbours were actually shot during the ceasefire so to me, the ceasefire means nothing.
Catherine McCartney, 37, sister of Robert McCartney, who was killed outside a pub in Belfast
The IRA has not spelt out where it stands on those within its ranks who indulge in criminal activity. It tells them they have to stop, but it does not say what happens if they don't. They should be subject to the rule of law and witnesses should be able to come forward against IRA volunteers.
US Congressman James Walsh, chairman of the Friends of Ireland in the US Congress
The IRA has always prided itself on discipline. These are military orders which is very, very significant. I am confident this is a genuine statement and decommissioning will follow, but we have to have verifiability.
Michael Gallagher from Omagh, lost his son in the Omagh bomb claimed by the Real IRA. His younger brother Hugh was also assasinated in 1984 by the IRA
It is good news if we are going to return to a normal society but what disappoints me most is that the British, Irish and American governments were negotiating with Sinn Fein but I have not heard anyone ask what the victims want.
Jim Dixon, the chairman of the Ely victims' group in Enniskillen, was badly injured in the 1987 Enniskillen Poppy Day blast
We are fed up listening to the IRA. It will be a long time before I believe a word they say. We have had lies from them for the past five years: just promises and broken promises. They have been rewarded for what they didn't do.
Grace Curry, whose daughter has been attacked by nationalist youths
As I live in an interface area, I would hope this will calm things. If the IRA want peace, then we need to see it in communities and Protestants need to be accepted as part of the city.
William Wilkinson, executive member of Families Acting for Innocent Relatives (FAIR)
We are not happy with this statement in the slightest.The greatest problem we have with the IRA statement is that the ''armed struggle was entirely legitimate". But legitimate means lawful, reasonable and fair. How could you explain that to members of our group, widows, orphans and those who have been badly injured?
US Republican Senator John McCain
This promise ... has the potential to spark a new, brighter day in the difficult history of Northern Ireland. The people of Northern Ireland and America will watch closely to see if the IRA indeed refrains from every form of violence and crime, and whether it engages in complete, verifiable disarmament. The people of Northern Ireland deserve no less.
John Hume, former SDLP leader and Nobel Laureate
Now the road is totally clear, I am reasonably confident we will make further progress. The real duty now, if we want to have a totally peaceful and stable country, is for all true democrats to implement the will of the people. I think this should make quite a substantial difference because obviously a complete and absolute end to violence is a necessity.
UDA brigadier Jackie McDonald who served half of a 10-year sentence for extortion
The Unionist and loyalist communities have to treat this with great suspicion. If there was any plan in the next number of years to bring about a united Ireland, loyalism and Unionism would rebel against it. We would become what the IRA were. We would have to fight against it any way we could.
Archbishop Sean Brady, Catholic Primate of All Ireland
I hope that the IRA will not only deliver on its declared commitment to end its armed campaign but also accompany this declaration with the kind of actions that will build trust... and encourage a positive response from others. Were that to happen I am convinced today's developments represent an opportunity to enhance the progress of recent years.