Talks leave Blair upbeat over Ulster's political void

Tony Blair was last night optimistic that the year-long political deadlock in Northern Ireland could soon be broken.

He was speaking after hosting talks at 10 Downing Street involving Irish Prime Minister Bertie Ahern, Ulster Unionist leader David Trimble and Sinn Fein president Gerry Adams.

Richard Haass, special adviser on Northern Ireland to President Bush, was also involved. Later, contacts continued between Mr Trimble and Mr Adams and talks will continue today between the parties and Government officials.

The British and Irish governments hope to announce that a fresh set of elections to the Northern Ireland Assembly will be held next month.

It was suspended a year ago today after fresh allegations of IRA activity, including the revelation of a republican spy ring operating at Stormont.

But now it is hoped that a republican-Unionist deal can be struck, with the elections followed by the formation of a new coalition government.

Mr Blair said: "The omens are very, very good if we can find the right ways of having elections in a positive and constructive atmosphere."

He struck an upbeat note yesterday, arguing that Northern Ireland had made "tremendous progress" and noting that the province had witnessed one of its quietest summers for years.

The Prime Minister added: "The general atmosphere, the climate, is conducive to finding a way forward and I hope we can because we owe it to the people of Northern Ireland."

But a Government source struck a more cautious note: "It was a positive meeting, but there's no guarantee of success at this stage."

There were early hopes that an agreement could actually be reached yesterday. But it is still believed that enough progress can be made by the end of the week to fix a date for elections, probably on November 13. Alternatively, the Government is prepared to press ahead with elections without reaching an agreement between the parties.

Republicans are under pressure from all sides to produce a new, more strongly worded statement, declaring that paramilitary activities have been permanently abandoned and announcing they will carry out a third act of weapons decommissioning.

Sinn Fein is calling for a guarantee that a future Stormont Assembly could not be suspended under Unionist pressure and for the promise of a rapid transfer of police and security powers from London to Belfast.

David Trimble said: "There has been useful work done. The work will continue and I hope there will eventually be a successful outcome to this, but that's not just here yet."

He added: "We need to see that there is going to be decommissioning of weapons, an end of paramilitary activity, people being fully committed to working with the institutions in the spirit of the [Good Friday] Agreement, and we haven't quite got all of that yet."

Gerry Adams, the Sinn Fein president, described the talks as "a series of positive engagements" but stressed that there was still a "volume of work to be done".

He said: "If we continue the type of very, very focused approach that we've taken, I still remain hopeful that we will get to where we want to be." Mr Adams added: "Our conviction is that whatever happens in the shorter term, in the long term all of these issues are going to be resolved. This process is going to move people forward into a dispensation that is based on justice and on peace. That's my gut feeling."

Mr Ahern said the atmosphere was one of the parties wanting to reach an accommodation. But this would not be easy and "time was short".