The Taoiseach said he believed agreement on the North-South bodies and the executive to be set up under the Belfast Agreement was linked to progress on decommissioning.

Mr Ahern also warned that if there was no agreement relating to the bodies and the executive prior to Christmas, "we are definitely creating for ourselves enormous difficulties. I emphasise that. I have been persuading people that is the case for the past number of weeks."

"I am hoping that all these matters will be resolved prior to Christmas. I really think that if they are not, we are making a terrible mistake."

Earlier, the Fine Gael leader, Mr John Bruton, asked if the Taoiseach was of the view that it was possible to bring the agreed arrangements for North-South bodies into effect, with the formation of a functioning executive, without some actual progress on decommissioning by the paramilitary organisations. Mr Ahern replied: "I suppose the short and direct reply to this question is that I think it would be very difficult to do that. I do not see Mr Trimble, at this stage, being able to deliver on that without some positive sign from the paramilitary organisations. I do not think it is within his call, quite frankly."

Mr Bruton thanked the Taoiseach for his frank reply. He added that the republican movement had stated on many occasions that there would not be decommissioning until there were talks. But when the talks were started, they said there would not be decommissioning until there was a settlement.

"Now that there is, in effect, a settlement, they still seem to be unwilling to agree to decommissioning. Would the Taoiseach agree that decommissioning at this stage by the republican movement would be entirely consistent with their own previous statements and a logical development of them? Therefore, in no way could it construed as a surrender."

Mr Ahern said during the past year the republican movement had stuck firmly to its ceasefire, although with one serious breach where an internal issue arose and an individual was murdered. Punishment beatings had been on the decline. "But we are still left with a position that they have issued two statements making it fairly clear that they do not intend to decommission ever. I think that is the difficulty . . . Perhaps if they were never made, people could look more positively from where we are trying to move."

Mr Ahern said the reality was that nobody was asking the republican movement to surrender. "They are not being asked to give up their arms in any formalised way to the RUC or the British army. They have been asked to make some unspecified gesture to allow room to co-operate with an international commission on decommissioning under an international agreement."

Replying to the Labour leader, Mr Ruairi Quinn, Mr Ahern said there was no truth whatsoever in reports that the Department of Agriculture was refusing to be "fulsome" in the scale of its co-operation with its counterpart in the North. He added that Mr Trimble and his colleagues had "grave difficulty" with proposals relating to the IDA and its Northern counterpart. Mr Quinn asked if it was true to say that the Government had made proposals of substance relating to agriculture and economic development, specifically foreign direct investment, and that "the offers from this side of the Border relating to substance for those cross-Border bodies have not been accepted by people north of the Border".

Mr Ahern replied: "Correctly and precisely, that is the position."