Taoiseach Brian Cowen welcomed today's deal to stabilise the North's power-sharing government.
Speaking this afternoon Mr Cowen said the agreement on the devolution of policing and justice powers and the re-commencement of meetings of the executive "had once again shown that democratic politics works".
"It is of great importance that devolution of policing and justice powers proceed. Its successful completion will be the final piece of the jigsaw of the peace process," said Mr Cowen
"I look forward to the effective implementation of their proposals and to the restoration to full capacity of all of the political institutions."
Mr Cowen said the Irish and British governments would continue to support the parties in the North.
British prime minister Gordon Brown said: “this is a historic day for Northern Ireland which writes a new chapter in their history.
“For the first time we have seen a breakthrough in the deadlock over the devolution of policing and justice and this is the last building block in the process for bringing peace and democracy to Northern Ireland.”
Minister for Foreign Affairs Micheál Martin also welcomed the breakthrough. "Today’s announcement, which follows direct contact between the two parties, is a significant development in terms of completing the process of devolution. It offers renewed assurance for the sustainability of the power-sharing arrangements at Stormont," said Mr Martin.
Labour Party leader Eamon Gilmore said he hoped the agreement would lead to the immediate resumption of Executive meetings and the full operation of all bodies including North-South ministerial meetings.
"I am glad that both parties acknowledged the need to resolve the impasse and particularly that it was possible for them to reach agreement on this issue without any apparent direct involvement by either the British or Irish governments," said Mr Gilmore.
"Now that this matter has been resolved we need to look again at other structures that were provided for in the Good Friday Agreement, but which have never been acted upon, including a North-South Parliamentary Body and a North South Consultative Forum," he added.
Fine Gael spokesman on North-South co-operation, Joe McHugh, said the deal was excellent news for employers and employees.
“This end to the institutional navel-gazing enables Ministers and MLAs in Belfast to re-focus their efforts on revitalising the Northern economy," said Mr McHugh.
The chairman of the Northern Ireland Policing Board Prof Sir Desmond Rea said there would be a "sense of relief right across the community that the political deadlock of the last number of months had been worked through and resolved".
"The people of Northern Ireland want to see the Executive fully functioning and working on behalf of all of the people on the issues that affect everyday lives. The future devolution of policing and justice forms a key part of that, and the process put in place today to facilitate this is to be welcomed. The board looks forward to working with the Assembly and Executive Review Committee in respect of this," he said.
Archbishop of Armagh and Primate of All Ireland, the Most Revd Alan Harper said: "I have had a particular fear, which I have previously articulated publicly, that a continuation of a vacuum in the political system might have serious repercussions for community relationships. I strongly urge everyone in the community whatever their political persuasion to contribute positively to establishing a pattern of confident good governance in Northern Ireland."
However, Traditional Unionist Voice (TUV) MEP Jim Allister dismissed today's agreement, claiming that too many concessions had been offered to Sinn Féin.
"Presented with the choice of facing down Sinn Féin and its bully boy tactics, or taking the opportunity to get rid of mandatory coalition, the DUP, for the sake of office, has chosen David Trimble's well trod path of a new tranche of concessions to IRA/Sinn Féin. It was Sinn Féin that had the shopping list and it is Sinn Féin's boxes which are being ticked today," said Mr Allister.
