But Mitchell Reiss, Mr Bush’s special envoy to Northern Ireland, has so far refused to heed calls from the British and Irish governments. They believe that Sinn Fein should be rewarded for renouncing its armed struggle and decommissioning IRA weapons.

Both sides are playing down any talk of a significant row, although sources in London have confirmed that “there is a clear difference of opinion between us on this issue”.

A senior US official acknowledged that it was “ironic” that Britain, having spent years fulminating over the millions of dollars raised by the Irish Northern Aid Committee (Noraid) to finance Sinn Fein and the IRA, should be seeking to get a fundraising ban lifted.

Restrictions were reintroduced by the Bush Administration last year after controversy over the IRA’s alleged role in the murder of Robert McCartney and the £26.5 million Northern Bank robbery.

These do not stop Friends of Sinn Fein (FOSF) raising up to $1 million a year. Instead, the ban limits the scope of visas issued to leaders such as Gerry Adams, preventing him from participating in fundraising. He had relished his star status in America since an earlier travel ban was lifted by President Clinton more than a decade ago.

Much of the $10 million-plus raised by FOSF has paid for luxury hotels and first-class flights for the party leadership, as well as the cost of staging events in the US. Less than 10 per cent of the money was registered to Sinn Fein back in Ireland.

Mr Bush’s ban has proved costly and personally humiliating for Mr Adams. In March FOSF had to refund more than $100,000 to supporters who attended a St Patrick’s Day breakfast in Washington with the Sinn Fein leader. The party president then missed a political event in Buffalo, New York State, when he was delayed at an airport by security staff who spotted his name on a federal terrorist alert list.

Since then, Mr Reiss is understood to have held talks with Peter Hain, the Northern Ireland Secretary, over lifting the ban. The British Government’s official position is that this “remains a matter for the US authorities”. But privately, Mr Hain believed that Sinn Fein deserved credit for the progress made during the past year and, perhaps, needs to demonstrate to its own community that their sacrifices have been recognised.

Mr Reiss, however, believes that the ban remains a useful lever on Sinn Fein in general — and the party’s refusal to sign up to Northern Ireland’s policing structures in particular.

Mr Reiss confirmed yesterday that he had spoken to the British and Irish governments about the ban, adding: “We remain in close consultation on this matter.”

He told The Times: “This is not so much about pressure from the US Government. If there is any pressure it is from inn Fein’s own constituents to remove sociopaths from their neighbourhoods.”

Significantly, he highlighted his recent article in an Irish-American publication, which stated: “In a worst-case scenario, Sinn Fein will not join policing for many, many years. Who polices these communities until then?” British officials believe that recent remarks from Sinn Fein leaders indicate that it is preparing to change its mind on participating in policing.

A special conference may be held in September, which could help to persuade the White House to lift the fundraising ban by November — the month when Sinn Fein last year hosted a $5,000-a-table dinner in New York.

GIVE AND TAKE

1994 President Clinton gives Gerry Adams US visa despite objections from Britian

1995 Clinton lifts the Sinn Fein fundraising ban in US. The organisation Friends of Sinn Fein USA set up. Americans donate more than $11 million (£5.9 million). Donations fall slightly after 9/11

2005 Fundraising ban is reimposed on by President Bush on Sinn Fein's leaders after Robert McCartney murder and Northern Bank robbery, both in Belfast

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