The North's political institutions appear set to continue in operation until after a British general election, despite the failure of the pro-agreement parties to resolve key issues in 12 hours of talks yesterday.
The Taoiseach, British Prime Minister and pro-agreement parties all put a positive gloss on the situation last night. They made it clear they were committed to the continuance of the power-sharing Executive and the other institutions despite the failure to reach agreement on decommissioning, demilitarisation and policing.
The Irish and British governments issued a joint statement expressing optimism that the outstanding issues can be resolved over the coming months, although most observers now believe the contentious issues have effectively been "parked" until after the British election in May.
However, the SDLP leader Mr John Hume, and the Sinn Fein president, Mr Gerry Adams, insisted efforts would continue before the election.
Significantly, the Ulster Unionist Party leader, Mr David Trimble, last night radically changed his public view of yesterday's IRA statement that it would re-engage with the de Chastelain commission. Having called it "simply a pre-emptive strike attempting to shift the blame for failure onto others", last night he called it "specific progress".
He hoped "we will begin to see the progress that we expected to take place after the meetings here in May last year. If that happens, we will be delighted. We hope that that will lead to a resolution of the weapons issue."
Mr Trimble's decision to portray the IRA statement in a positive light indicates his desire to face down any suggestion from dissidents that the UUP take further action damaging to the political institutions. He said he would review his veto on Sinn Fein attendance at meetings of the North-South Ministerial Council depending on progress made between the IRA and Gen de Chastelain.
There is a belief among many talks participants that Mr Trimble will manage to avoid a serious challenge to his authority on this side of an election.
The statement from the two governments last night emphasised the progress that had been made on the various issues and held out the prospect of further agreement. On policing, the governments say they believe agreement will be reached by June, although they don't say how this will be done.
The Taoiseach told a press conference last night that "a clear process" now existed within which to address the issues, but this process appears open-ended and uncertain. Mr Blair said the differences had "narrowed considerably".
Both leaders welcomed the IRA statement. But Mr Blair added that "there is an expectation now that this must go on to be substantial re-engagement with the commission for decommissioning".
He said the British government was "prepared and on stand by" to make progress in areas in which they were expected to move, such as demilitarisation.
The statement also addresses the republican concern about so-called OTRs - prisoners on the run - who would still face prosecution should they be apprehended, despite the early release programme that has applied to paramilitary prisoners.
Should the May 2000 agreement be implemented - in other words should the IRA agree a decommissioning programme and begin a process of decommissioning - the British government would agree that such persons were no longer pursued.