The British military presence in the North could be reduced to pre-Troubles garrison levels within a short time if the proposals set out in the British government's Security - Return to Normality document are implemented.
However, the residual threat of terrorist violence from dissident republicans and loyalists is likely to result in this process being delayed well into the new year.
Senior gardai suspect that the dissident republicans, who were responsible for the Omagh bombing in August last year, have in recent months moved their operations north of the Border to south Armagh and south Down.
The Garda believe republicans are seeking to establish bases in Northern Ireland following the successful Garda operations against them in the Republic during the autumn.
While the threat from dissidents remains, senior sources say there is an acceptance that both the British army and RUC have to maintain a presence in the areas where the dissidents are threatening to establish footholds.
Yesterday's document refers to the "prevailing threat" and the commitment to respond to events such as the Omagh bombing.
It is understood there is complete agreement between both governments in respect of the response to the threat from the dissidents.
Otherwise, the document sets out the British government's response to its commitment under the Belfast Agreement to reduce security measures in the North.
It points out that there have already been significant reductions in troop levels and says that a further three battalions, involving a total of around 2,500 troops, are likely to be withdrawn in the near future.
The document says there are under 15,000 service personnel in the North. According to security sources in the North, there are much fewer than this figure, and many British army regiments have only a "paper" presence.
The document says 26 army bases have closed since the first IRA ceasefire in 1994. Security installations have been dismantled around town centres and at Belfast Airport. Land requisitioned from the GAA club in Crossmaglen in south Armagh was returned earlier this year.
The British military presence, particularly in south Armagh and south Down, remains one of the most visible issues relating to security in the North. The British army still retains a high-profile presence in the Border area, with around 30 bases in south Armagh, all of which are serviced by regular supply flights by helicopters.
It is expected that the military presence in places such as south Armagh will continue so long as there is not local acceptance of the RUC as a police force and as long as there is a threat from dissident terrorist groups.
The use of emergency antiterrorist legislation has been reduced considerably and the document states that it is the British government's intention to remove these powers "as soon as the security situation allows".
The proposed imminent closure of the last two remaining RUC interrogation centres, at Strand Road in Derry and Gough Barracks in Armagh, is an indication of the normalising of security measures in the North.
The British also commit themselves in the document to an increase in the proportion of jury trials compared with cases heard before juryless "Diplock" courts. By contrast, the Republic is expected to increase its juryless special court system in the new year to deal with a backlog of cases involving activities by dissident republicans and by organised criminals.
The promised closure of the Maze prison, formerly the Long Kesh internment camp, will be of symbolic importance. Yesterday's document commits the British government to the closure of the Maze in 2000. All further dissident republican and loyalist prisoners will be held in high-security blocks in Maghaberry Prison, about seven miles from the Maze.
There is no commitment to end the use of plastic bullets or "baton rounds", although these weapons have been responsible for more than 20 civilian deaths and many serious injuries. It is still judged that the weapons are a lesser evil than the use of live bullets in serious riots and public disorder.
However, the document clearly commits the British government to a scaling down of security operations, even though there is still an incipient threat from dissident terrorist groups.
It will, therefore, increase pressure on the IRA to respond with a gesture over decommissioning.
Although there are no positive indications yet that the IRA is prepared to decommission weapons, the leadership has been indicating to members that there will be some form of arms disposal, which will be verified by the de Chastelain commission.
There are hopes that this could take place in the new year.