The Irish and British governments and security sources last night said they had no reason to believe an IRA initiative on decommissioning was imminent.
The speculation arose following reports in the British press yesterday that the IRA was on the brink of handing over weapons.
The Government had "no new information" about an early decommissioning of IRA weapons, a spokesman said last night. He added that while "positive noises" were being made, and while the Government believed the circumstances would arise to allow for decommissioning, such a move was not imminent.
There was initial confusion as to the British government's assessment of the position.
However, Mr Blair's spokesman welcomed a statement by Gen De Chastelain - the head of the international body on decommissioning - that he believed it would be achieved by the target date of May 2000.
"It is true there have been signals that we welcome. We have been able to put the mechanisms in place for decommissioning to happen and we want it to happen as soon as possible.
"There are signals that they [the IRA] are aware of the importance of this," the Downing Street spokesman said.
However, British sources last night said they were not aware of any specific signals on the issue since Padraig Wilson, the commander of IRA prisoners in the Maze, said last month that he was hopeful decommissioning could take place "once we have the sense that the arrangements envisaged in the [Belfast] Agreement are beginning to function".
Republican sources said last night that suggestions that the IRA could decommission within the next two months should not be dismissed.
While they were not aware of immediate plans to decommission, the sources said, arms had recently been moved from dumps in the Republic to the North, and this could be in preparation for decommissioning.
"Virtually everything has gone," one source said.
The sources said that while the IRA would never decommission its entire arsenal, a section could be handed over to ease the pressure exerted on the North's First Minister, Mr David Trimble, on the issue.
Meanwhile the protest in Drumcree was scaled down significantly again yesterday. The only Orangemen remaining in the field were the Portadown District Master, Mr Harold Gracey, and about 10 other district officers.
However, Orangemen in Portadown are planning a mass demonstration in the centre of the town tonight. The spokesman for Portadown district lodge, Mr David Jones, said the protest would prove that support for the Portadown Orangemen had not dwindled, as the media had suggested.
"We are calling for a full turnout of people to come to Portadown to show they are still supporting us."
He added that tonight's protest would be followed by other actions across the North, as the situation was "developing into a battle of people-power for cultural and civil rights".
In Derry yesterday a more conciliatory mood was evident as it was announced that members of the Apprentice Boys of Derry are expected to attend a meeting of the city's Civic Forum on Wednesday to discuss next month's Apprentice Boys' parade.
The Civic Forum, established in the wake of rioting which followed last August's parade, tried to encourage dialogue between the Bogside Residents' Group, the Apprentice Boys and business and church leaders.
However, it was boycotted by unionist representatives and the Apprentice Boys. Their expected attendance at Wednesday's meeting has raised hopes that a model for the resolution of contentious marches might be reached.
The Apprentice Boys are to meet unionist councillors today.