The Progressive Unionist Party leader, Mr David Ervine, has predicted that the IRA is on the brink of disarming and ending activity but added that if republicans want to prompt a positive response from loyalism it should declare its "war is over".
Mr Ervine told his party's annual conference in Belfast on Saturday that the IRA was preparing to make a major, historic gesture and he believed the Northern executive and Assembly would be back in operation by February.
"We are about to see serious movement by the IRA. Of that, I do not have any doubt. It will be historic, deeply significant and undoubtedly welcome. But how much more it would be welcome if it is accompanied by a statement that the war is over," he said.
"They need to say the war is over. I would stop short of saying whatever else they do would be minimal if they fall short of that," he said, adding that loyalism needs reassurance that the Belfast Agreement was in fact a political settlement.
Mr Ervine predicted that the DUP would enter into government with Sinn Féin, whom it viewed as the "devil incarnate". He said that the British government would close the current gap between the two sides.
There was already evidence of a DUP preparedness to do a deal, particularly with the DUP leader's willingness to meet the Taoiseach, Mr Ahern, in Dublin, where it was "the silence of Ian Paisley that was shocking".
Mr Ervine, whose party, the PUP, is the political wing of the UVF, strongly indicated that if the IRA acted there should be a corresponding response from loyalist paramilitaries. He said the judgment must be made "that Northern Ireland's future can only be adjusted, amended or created by clearly democratic and peaceful means".
"I can't advocate that very soon because the IRA are going to make spectacular moves that the loyalists I know will naturally follow.
"I can't advocate that. What I can say to you is that it is my honest and humble belief that loyalism is much more capable of positivity than anybody believes," he said.
Mr Ervine said it was "absolutely unreasonable that loyalism is constantly pushed into a corner and branded with a simplistic and unreasonable name, criminality".
He conceded there were criminals who masqueraded as loyalists but, in an obvious reference to loyalist Johnny Adair, said it was unreasonable that loyalism was portrayed as "pumped-up individuals with bald heads and earrings, walking about with dogs with t-shirts".
Mr Ervine said that he had heard Mr Ian Paisley jnr say in Glasgow that the DUP was a socialist party. Sinn Féin also trumpeted that it was socialist but yet Sinn Féin in the last Assembly enthusiastically embraced public-private partnerships and private finance initiatives, which were totally against the concept of socialism.
He said both parties could demonstrate whether they were truly socialist by withdrawing the water charges that the North's direct rule ministers plan to introduce.
The Minister for Foreign Affairs, Mr Ahern, and the Northern Secretary, Mr Paul Murphy, are due to meet at Stormont tomorrow as efforts continue to break the deadlock between the DUP and the pro-Belfast Agreement parties.