The British and Irish governments will attempt to salvage the peace process today with a two-pronged approach based on a report on decommissioning by Gen John de Chastelain and a pledge of legislation to ensure commitments on the disposal of weapons are kept.
As Sinn Fein president Mr Gerry Adams dramatically declared that his party's initiative had "failed", the remaining hopes of a breakthrough rested on joint proposals from Mr Ahern and Mr Blair to be made to the parties following the resumption of the negotiations this morning.
There was speculation that, failing a breakthrough this morning, the leaders might set a time-limit for the parties to respond, ahead of a likely full-blown Anglo-Irish summit at which Mr Blair and Mr Ahern would review the options open to them.
While the Ulster Unionist Party rejected Sinn Fein's formula on weapons disposal in a meeting with the republicans last night, senior sources said all was not lost.
The proposal to bring in legislation had found favour in the unionist camp. While the formula put forward face-to-face by Sinn Fein had been rejected, the report from Gen de Chastelain could have a different reception.
Republican sources claimed the two prime ministers were merely seeking a "soft landing" for the current negotiations. A different interpretation of events came from other senior participants in the talks. The two governments were convinced that the republican movement was serious about decommissioning. This view would also be propounded by Gen de Chastelain in his report.
It would be a good deal easier for the unionists to accept a recommendation from the general and the two governments than directly from Sinn Fein.
Talks participants said Mr Blair had scored a major negotiating success with the unionists yesterday by persuading them to give due weight to his legislative proposals to provide for penalties in the event that decommissioning failed to take place.
The Prime Minister met the UUP Assembly team for over half-an-hour last night for a question-and-answer session. It is understood the legislative guarantee was key ingredient in what was seen as a very successful meeting.
The next stage of the process, sources said, was to persuade the unionists to accept the de Chastelain report, the text of which would underwrite the good faith of Sinn Fein's undertakings on weapons.
Gen de Chastelain's report was expected to indicate that he believed Sinn Fein had agreed to a verifiable start to the process of decommissioning, the formula the UUP has been canvassing for some time.
If the unionists could be satisfied on Sinn Fein's commitment to the disposal of weapons, a meeting of the Ulster Unionist Council could take place within 10 days to approve participation in an inclusive executive.
However, it was clear last night that Sinn Fein was unhappy with the course of events. Legislation has been opposed by the party which believes there are sufficient mechanisms within the Belfast Agreement already to maintain discipline over the various parties.
The Sinn Fein president, Mr Gerry Adams, released the text of a party declaration which stated that as part of the overall implementation of the Belfast Agreement and with the formation of an inclusive executive "we believe that all of us . . . could succeed in persuading those with arms to decommission them in accordance with the Agreement".