Mr Tony Blair is under growing Conservative and Ulster Unionist pressure to establish clear linkage between prisoner releases and Sinn Fein's eligibility for office in a new Northern Ireland assembly with the issue of decommissioning paramilitary weapons.
It is understood that the Conservative leadership has declined to give the government assurances that it will facilitate the speedy passage of the legislation on prisoner releases unless that linkage is made explicit.
The issue dominated exchanges in the Commons yesterday between the Prime Minister and the Conservative leader, Mr William Hague. And its potential to impact on both the referendum campaign and the assembly elections was underlined last night when Lord Mayhew, the former Northern Ireland Secretary, and Lord Molyneaux, the former Ulster Unionist Party leader, took up the theme as the House of Lords began to process the Northern Ireland (Elections) Bill, cleared by the Commons on April 22nd.
In a barely-coded attack on the Belfast Agreement, Lord Molyneaux said "acquiescence" to the agreement was decreasing against "a background of hostility and suspicion" and serious doubts about the working of the proposed assembly. If the assembly failed, he said, people "should not despair" because the government's scheme for partial devolution to Wales provided an alternative.
The IRA's resistance to decommissioning, he said, threatened "a nightmare situation" of elected politicians "sitting at the table side by side with terrorists with guns on the table, under the table or outside the door".
He indicated his intention to table an amendment to the Bill, preventing people holding office in the assembly if they belong to parties which had not permanently renounced violence or surrendered weapons.
Lord Mayhew told the Lords: "It was one thing, albeit an uncomfortable thing, to say that membership of the talks was compatible with some decommissioning taking place in parallel with those talks. It is surely quite another thing - and different in principle - to say you may participate in the government of Northern Ireland, the fruits of those talks which are now concluded, while refusing to give up the means of bringing illegal pressure to bear on your colleagues and fellow ministers."
Earlier, Mr Hague again assured Mr Blair of Conservative support for a Yes vote in the referendum. But he asked: "Do you share our grave concern about last week's IRA statement saying they had no intention of decommissioning their arms? And in the light of today's reports from Sinn Fein, will you urge Sinn Fein/IRA to sign up to the whole agreement at their meeting this weekend?"
Mr Blair said: "It is the whole agreement as a package that stands and everybody that says `yes' to it is saying `yes' to all of the agreement and not just the bits they like, simply leaving aside the bits they don't like, but the agreement in its entirety."