Taoiseach Bertie Ahern has said that lifting the ban on the IRA would not require legislation and could be done by a Government order.
However, the IRA would have to change its rule book for this to occur, and he believed such a move by the Government was "for the longer haul".
He said the Offences Against the State Act, which outlawed the IRA in 1939, envisaged a situation where a banned group could have changed itself sufficiently that it was no longer an illegal group.
Under the legislation a group that promotes, organises or advocates the use of force to change the Constitution or for other means is illegal, and the Government can issue a prohibition order against specific organisations as a result.
"It's all set out. In 1939 the government of the day anticipated that an unlawful organisation might transform itself into a new mode and become exclusively political, and it's why the 1939 Act allows the Government to revoke an order providing that an organisation is unlawful," Mr Ahern said.
"They never have to drop the name IRA, the Provisional IRA; that isn't the issue," Mr Ahern told RTÉ radio yesterday.
"It is the conditions about their rule book and their conspiracy against the State and the armed campaign and all of the other things.
"So before it can ever change they have to comply with all of those issues, and I think that is the challenge and I'm not saying they have to do that in the next week."
Asked whether he thought the Government might lift the order banning the IRA in the future, he said: "Yes, and it can actually be done quite simply. It can be revoked or amended."
However, it could "only happen after a period of time" when an assessment was made that the Provisional IRA was no longer involved in activity that constituted a breach of the legislation. He said the views of the Independent International Commission on Decommissioning and the International Monitoring Commission could be "taken account of when making that decision".
If the IRA did not "change in that fundamental way it will remain unlawful and the sanctions of the law fully apply to it".
Minister for Justice Michael McDowell also said yesterday that the IRA would have to change its "constitution" before the Government would lift the prohibition order, and that this would require a full IRA army convention.
Mr Ahern reiterated his belief that last Thursday's IRA statement meant a complete end to criminal activities by the organisation even though it did not mention the word "criminal".
"Well, time will tell, but I think that as of now I'm ready to believe that this week's events, if followed by necessary actions, do offer a clear sign that the Provisional IRA have come round to this peaceful analysis."