The Taoiseach and the British Prime Minister believe they now have the basis for a major political breakthrough in the North which will pave the way for Assembly elections on May 29th and the restoration of devolution thereafter.
The British and Irish governments have effectively concluded the "acts of completion" negotiation with their own agreement on two key issues still dividing Sinn Féin and the Ulster Unionists.
Mr Blair and Mr Ahern made the decision to bridge the gap between the two parties late on Tuesday night by making their own judgment on the vexed issues of "OTRs" (on-the-run terrorists) and "sanctions" to be deployed against parties deemed in breach of their commitment to exclusively peaceful means.
Echoing the prime ministerial warning that their agreed terms for the full implementation of the Belfast Agreement were not a basis for ongoing negotiation, British sources last night expressed confidence that the "huge" nature of the breakthrough claimed for the Hillsborough talks "will be seen in six weeks time."
An Irish Government source stopped short of predictions, while confirming: "We feel there is a deal there now and good grounds for optimism."
The predicted breakthrough remains predicated on expectations of dramatic moves by the IRA to confirm its cessation as an active paramilitary organisation.
However The Irish Times understands that the emerging blueprint - which Mr Blair and Mr Ahern hope the parties will endorse when they return to Belfast next month - covers all the outstanding issues, including further policing reform.
The overall implementation programme could take between two and five years to complete.
British officials are drafting primary legislation to effect the postponement of the Assembly elections, originally scheduled for May 1st. With the prorogation of the present Assembly due on March 21st this is expected to be moved in the Commons in the week after next.
Legislation will also be required to effect the proposed "sanction" to be used against any party deemed in future breach of its commitment to peaceful means.
It is believed this will give the British Secretary of State for Northern Ireland the final power of decision to exclude a party from office.
However, it is also understood the Northern Secretary would not have the power of unilateral action and would only act on the recommendation of the proposed Independent Monitoring Body, which will comprise appointees from Britain, Northern Ireland, the Republic and the United States.
Designed to protect against "the abuse of sanctions", sources say this will open the process to the court of international opinion. At the same time Britain is expected to revoke the Northern Ireland Act 2000 giving it the power to suspend the Assembly.
A judicial process is reportedly planned to hear any cases against OTRs, in the absence of the accused person and to reach a verdict before releasing anyone found guilty of an offence under licence in line with the prisoner release programme established under the Belfast Agreement.