The House of Commons voted to permit Sinn Féin the use of office facilities and expense payments without having to pledge allegiance to the British Queen.
The move met strong opposition from the Conservative Party and also provoked dissent within the ranks of the Labour Party.
The 322-189 vote cleared the way despite bitter debate and Sinn Féin's four elected members will now receive free offices and almost £150,000 each in annual expense payments.
"We need to bind Sinn Féin as tightly as we possibly can into the political system and the political process of this house," argued Helen Jackson, who voted in favour.
The Conservatives and the Ulster Unionists, complained that Blair was granting concessions too easily to Sinn Féin at a sensitive period in peacemaking. They argued that the government should have held out for firmer assurances that the IRA would keep disarming, a process begun in secret last October. AP