The IRA has expressed its "deep concern" at the collapse of talks last year which would have allowed the restoration of devolution in Northern Ireland.

In its annual new year statement, the IRA said that its third act of decommissioning, which it had hoped would lead to a new power sharing arrangement, involved the "largest amount of arms to date".

The act of decommissioning, which was made in October, was rejected by David Trimble, the Ulster Unionist leader, because he believed it was not transparent enough.

Since then the Northern Ireland assembly elections has seen gains for Ian Paisley's Democratic Unionist Party and Sinn Fein making it even more improbable that devolution will be restored in the coming months

The IRA blamed both the British and Irish governments for the impasse in its new year statement.

It accused the two governments of not living up to its commitments in moving to restore the Good Friday institutions.

"The two governments have not honoured their part of it. Consequently there has been no progress on a range of issues involved.

"The British Government carries the premier responsibility for that. Its failure to deliver is of deep concern."

The IRA reiterated its demands that Tony Blair should push ahead with troop removals from Northern Ireland, more policing reforms and an amnesty for on-the-run prisoners.

There was no indication, however, in the IRA statement that they intend to return to terrorism.

Security sources say the IRA’s involvement in paramilitary assassinations dropped significantly over the past 12 months.

The Provisionals claimed their unilateral actions had helped keep the peace process alive.

"During the past year we have again demonstrated our readiness to facilitate progress in a clear and meaningful manner.

"The leadership of the IRA have kept their word and fulfilled their commitments. Others must do the same."

The need for a breakthrough has intensified ever since Sinn Fein and Ian Paisley’s Democratic Unionists emerged from the November elections to the suspended Assembly as the most powerful parties on either side of the union-nationalist divide.

Mr Blair and Irish Premier Bertie Ahern must try to find a solution to the seemingly impossible task of getting the two extremes to work together during a review of the April 1998 Good Friday Agreement.

Talks involving all sides in Belfast are due to begin within weeks amid demands from Sinn Fein leader Gerry Adams that they are limited to a month.

But with negotiations expected to drag on much longer, the two governments will have to make some tough decisions later in the spring about the future direction of the peace process.