MR David Trimble, the Ulster Unionist Party leader, is to hold talks with the Government over a working dinner in Dublin next Monday night.
News of the breakthrough, is confirmed in both capitals last night, as Sir Patrick Mayhew, the Northern Ireland Secretary, finished a day of intensive discussions with unionist leaders in London.
Mr Trimble will meet the Taoiseach, Mr Bruton, together with the Tanaiste, Mr Spring, and the Minister for Social Welfare, Mr De Rossa. It is expected Mr Trimble will be accompanied by his deputy leader, Mr John Taylor, and his chief whip, the Rev Martin Smyth.
Irish Government sources described Monday's meeting, as "very important" and expressed the hope that it would be "the first of many".
Meanwhile, there was speculation last night that the Democratic Unionist Party might also agree to have talks with the Government.
There was no confirmation of whether or when such meeting might occur, although one DUP source said the party had made it clear it would not talk to Dublin about proposals for an elective process in the North as a route to all party negotiations.
That issue dominated yesterday's talks in London between Sir Patrick, and DUP and UUP delegations.
The Northern Secretary, and his Political Development Minister Mr Michael Ancram also met the Independent Unionist MP for North Down, Mr Robert McCartney. The Rev Ian Paisley emerged from his talks claiming that opposition to an election by a list system based on a single Northern Ireland constituency was "waning". However, he acknowledged the British government had not signalled its preference for the form elections should take.
Mr McCartney also told Mr Ancram that - while he had no personal preference either way - the list system would clearly be better, especially given the importance attached to ensuring representation in any elected body by the smaller parties.
But with relations between Mr Major's government and the UUP said to be "at rock bottom", senior sources in London, Belfast and Dublin believe the issue will finally come down to a governmental decision at the end of the allocated 10 day period for intensive consultations.
The Taoiseach and the British Prime Minister will review the options as the 10 day period expires next Wednesday - most probably by way of a telephone conference.
Sources said last night that a summit meeting remained a possibility, although diary possibilities might be complicated by the Taoiseach's planned departure for the US on March 13th.
There was confusion last night about arrangements for the White House St Patrick's Day celebrations, following indications earlier in the week that Mr Trimble might also attend the event.
The UUP leader emerged from a "frosty" 90 minute meeting last night claiming Sir Patrick had done nothing to "clear the air" between the two sides following last week's row over ministerial claims that the UUP had offered the government a "clandestine deal" in the run up to the vote on the Scott report.
Mr Trimble said the meeting had been "workmanlike" but that they had failed to cover all the issues, and would meet again next week. It is understood Mr Trimble's next meeting with Sir Patrick will be on Tuesday morning after his talks with the Taoiseach and other ministers in Dublin.
British sources yesterday discounted renewed reports that Sir Patrick intends to stand down in a summer reshuffle. Although it is widely believed Sir Patrick intends to retire at the next election, sources close to him said they believed he wished to continue in his post until then.