The Northern Secretary, Sir Patrick Mayhew, said yesterday he. did not believe the political and military situation in the North would deteriorate to pre ceasefire levels.
Sir Patrick, addressing pupils of Wallace High School in Lisburn, Co Antrim, which is next door to the bombed British army headquarters, said only the IRA knew if it was planning to start full scale violence in the North.
However, he believed it would be impossible for the Provisionals to turn the clock back because even they did not seem confident that their campaign would achieve its ends.
There appeared to be confusion in republican ranks. He said: "In the past, IRA used to claim it was bombing its way to a united Ireland. Now it claims to be setting off bombs in order to get people to talk to Sinn Fein".
Sir Patrick praised loyalists for showing restraint after last week's IRA bombing and said it would be "senseless" for them to "abandon their position of strength and fall into the very trap their enemies are preparing for them".
Urging the CLMC loyalists to maintain their ceasefire, he said loyalists had made remarkable progression during the peace process and had no need to fear that the Union was in danger.
"Before their ceasefire was declared, the loyalist terrorist groups had a dreadful reputation for senseless barbarism," he said. "But the past two years have revealed a very different side to loyalism. The loyalist leadership called the ceasefire in the justified belief that the democratic wishes of the people would continue to be respected.
"From that position of strength, loyalist representatives have been conspicuous in their self confidence and clear sightedness and the ceasefire has held with a discipline which surprised many."
Sir Patrick said everything that had happened since the IRA ceasefire was announced in August 1994 showed that the loyalist analysis had been correct. "We paid no price to get the IRA ceasefire. We will pay none for a restoration either," he said.
Sinn Fein's influence at negotiations would be based on its electoral mandate alone. "An inch more influence than what derives from the 15 per cent of the vote they achieved at the recent elections would be a betrayal of democracy and a reward for violence.
"So if they believe bombs can win them a position of strength, they are mistaken. If they believe they can make Northern Ireland too expensive for the British government to administer, they are wrong. Whatever the cost, whatever the damage, it is a price we will pay to protect democracy."