Sinn Fein is to receive around £500,000 (€730 million) in House of Commons allowances after MPs passed a motion to have them restored.
After a passionate debate at Westminster, MPs gave their approval to the British government's move as Ministers urged them to support Sinn Fein's efforts to bring republicanism down a path of total peace and democracy.
Northern Ireland Secretary Peter Hain told MPs the restoration of the allowances which were suspended in March last year over allegations that the IRA was behind the £26.5 million Northern Bank robbery was a democratic issue at heart.
He asked them: "Do you want Sinn Fein representing their constituents and developing as a democratic party?
"Do you want Sinn Fein playing the fullest role they can in the Palace of Westminster?
"The question before the House is whether we want to... encourage the Republican Movement further down the path of democracy.
"If we look around the world the transition from conflict to peace was always going to be tortuous.
"International experience demonstrates such transitions always are.
"The House has the opportunity tonight to vote for the normalisation of politics on behalf of all parties in Northern Ireland, Sinn Fein included, and a Northern Ireland of democracy, hope, peace and stability by supporting these motions."
The British government, however, faced criticism from opposition MPs for proposing Sinn Fein's five MPs should receive money even though they did not sit in the chamber of the House of Commons.
During the debate, Democratic Unionist deputy leader Peter Robinson used Parliamentary privilege to name a number of individuals including a prominent businessman who he said were involved in financial dealings for the IRA.
The east Belfast MP argued the awarding of allowances to Sinn Fein amounted to the government rewarding continued criminality by republicans.
"The sums of money involved with these allowances would be considerable for other political parties in Northern Ireland but they pale into insignificance within the multimillion pound coffers of the Republican Movement," the DUP deputy leader said.
However the reinstatement of the allowances and the additional new allowance would encourage republicans to believe that their present level of criminality can be tolerated by the government, he said.
"The government's message to the IRA today in these proposals is that they have reached an acceptable level of criminality."
Opposition MPs referred to last week's publication of the eighth Independent Monitoring Commission report which stated that while the Provisional IRA was making moves towards ending its armed campaign, some members remained involved in criminality, intelligence gathering and unauthorised violence.
During the debate, SDLP leader Mark Durkan argued that the money would give Sinn Fein an unfair advantage at a constituency level against other parties.
The Foyle MP asked: "Is it not a fact that I will not be able to spend short money in my constituency but Sinn Fein will be able to spend their representation money on activity in my constituency against me?"
Conservative Northern Ireland spokesman David Lidington and Shadow Leader of the House, Theresa May, opposed the government's motions because they claimed it was an assault on the value of the House of Commons.