Difficulties over the North-South relationship lay behind the failure to produce a draft text outlining a possible Northern settlement due to be presented to party leaders at the Stormont talks last night by the chairman, Senator George Mitchell.
Problems arose over the Strand Two element of the paper dealing with the crucial issue of North-South bodies. It was initially reported that the chairman would go ahead with a paper dealing with other elements in the talks but, because of the interlocking nature of the strands, it was eventually decided not to proceed with a partial document.
Dublin sources dismissed suggestions that the negotiations were in crisis but other participants said the development was "very worrying". There were conflicting reports, with some sources suggesting the British and Irish governments had failed to agree a joint position on Strand Two whereas others claimed a position had been agreed but Mr Blair pulled back because of a growing unionist backlash.
Mr Mitchell told reporters it was hoped to produce the "full package" within days. He and his fellow-chairmen were disappointed but still intended to meet the April 9th deadline.
They would work with the parties over the weekend. He denied suggestions that Sinn Fein had contributed to the delay. He said it would be "unwise" to establish a new deadline for producing the draft text.
The Sinn Fein leader, Mr Gerry Adams, said it was up to the two governments to bring forward a deal and everybody must "knuckle down" to reach an agreement.
The Ulster Democratic Party leader, Mr Gary McMichael, said it would have been wrong to present "a snapshot of one element" of an agreement. A single, comprehensive text was required.
It is understood the Taoiseach and the British Prime Minister kept in close contact with the talks and reportedly took part in a conference telephone call with Mr Mitchell during the evening.
A pattern has emerged in this phase of the talks where Strand One is being negotiated at Stormont while Strand Two is primarily being dealt with in London by the two heads of government. Mr Mitchell has expanded his role from chairman to broker.
The understanding early in the day was that the document, said to be about 35 pages long, would be produced at around 8 p.m. but its contents would be made known only to party leaders.
Meanwhile, the two heads of government were said to be negotiating a new British-Irish Treaty in London. This was considered to be a more important paper than the multi-party document.
The final text of the Treaty is not expected before Thursday and after last night's events may be delayed further. If the talks are going well, the two heads of government may decide to come to Belfast on Wednesday evening and remain until Friday.
However, last night's development must be considered a serious setback, however temporary. It underlines the delicacy of the North-South issue and the need for the governments to work out a position which can be presented by unionists as non-threatening to the British link, while nationalists can argue that it is a steppingstone to Irish unity.