SINN Fein was searching for alternative premises last night after Labour controlled Camden Council blocked the party's plans to open its first headquarters in central London.
The decision, taken earlier this week, followed the intervention of the Labour frontbencher, Mr Frank Dobson, and a fellow MP, Ms Glenda Jackson. Ms Jackson told the council Sinn Fein was "an organisation that has refused to condemn violence."
The council, suggesting the building itself might become a target, defended the decision in terms of concern for residents' safety and the likelihood of increased insurance premiums.
The decision, taken privately by council leaders, was deplored by the Camden Irish Forum. But despite Mr Dobson's involvement as a constituency MP, the Labour leadership avoided direct comment on Camden's reversal of an earlier decision to lease one of its properties to Sinn Fein.
The property in question, at Theobalds Road in Holborn, is located just yards away from a police station and Ministry of Defence buildings.
Mr Tony Blair's office deflected queries to Dr Mo Mowlam, the shadow Northern Ireland secretary. Dr Mowlam said "I am not familiar with the details of the case. In the end it is a matter for the members of Camden Council."
Asked if she would expect or wish other Labour councils to follow the Camden example, Dr Mowlam replied "It must be a decision for the local authority, wherever it may be."
A Sinn Fein spokesman, Mr Frank O'Neill, who said the decision "speaks for itself really," confirmed that the party was now considering a number of alternative locations.
But there was little doubt about Sinn Fein embarrassment, and Labour Party sensitivity, about the controversy. Mr Blair and Dr Mowlam have already come under fire from the party's pro nationalist wing for what is seen as uncritical support for Mr Major's conduct of the Northern Ireland peace process.
And there was speculation last night that Camden which has previously extended invitations to Sinn Fein speakers, and has an official policy supporting a united Ireland had come under pressure from the Labour hierarchy.
In line with Mr Major's position, Mr Blair has yet to meet the Sinn Fein leader, Mr Gerry Adams. However, Dr Mowlam and her froatbench team have had talks with the party.