Mr David Trimble is seeking to reduce significantly the Irish Government's role in the proposed international Independent Monitoring Body (IMB), seen by London and Dublin as central to attempts to restore the Stormont Assembly.
This was confirmed last night as pro-Belfast Agreement unionists predicted this was a second issue - in addition to the resumed disciplinary action against three of his MPs - on which Mr Trimble could face defeat at a meeting of the Ulster Unionist Council in the autumn.
However, a serious Dublin-London dispute seems in prospect if Downing Street accepts one proposal being canvassed in unionist circles - namely that the British government should assume sole responsibility for the appointment of all the members of the IMB.
The indications are that Dublin would resist any attempt to give the Northern Secretary unilateral power to exclude parties from a Stormont Executive as demanded by the official Conservative opposition at Westminster.
The proposal for an international body was developed in response to Mr Trimble's original demand for an independent element in the monitoring of paramilitary ceasefires, in the context of the debate about "sanctions" to be deployed against any paramilitary-related party deemed in breach of its commitment to exclusively peaceful and democratic means.
It is understood Dublin only reluctantly agreed to the proposed IMB, which is strongly opposed by Sinn Féin.
However, the British-Irish agreement concluded last April by the Taoiseach, Mr Ahern, and the Prime Minister, Mr Tony Blair, took the idea considerably beyond Mr Trimble's original concept and afforded the Irish Government crucial safeguards against any abuse of a new sanctions regime.
Specifically it was agreed that the British government would appoint two of the four members of the IMB (including one from Northern Ireland) while the Irish and US governments would each appoint one. It was also agreed that - in addition to monitoring paramilitary activity and British security normalisation as part of any "acts of completion" deal - the IMB would have a more extensive remit. This would give it "a more general responsibility to consider claims by any party in the Assembly that another party is fundamentally in breach of requirements" set out in the Belfast Agreement or this year's British-Irish Joint Declaration.
In addition, Irish sources have confirmed their understanding that the proposals would actually lengthen the process of adjudicating on any alleged breach and, importantly, would not significantly increase the powers of the Northern Secretary.
Under the terms of the April agreement, the IMB would report its findings on any alleged breach to the two governments, while it would be for the Assembly Implementation Group in the first instance to decide on the action to be taken, voting on a cross-community basis.
If, for example, a motion to exclude an individual or party from Executive office failed to win cross-community support, "it would be a matter for the British government, in consultation with the Irish Government and the parties, to resolve the matter in a manner consistent with the report of the Independent Monitoring Body."
Mr Jeffrey Donaldson MP and Lord Kilclooney (formerly Mr Trimble's deputy Mr John Taylor) have been joined in opposing the plan, which they say diminishes British sovereignty over Northern Ireland and breaches the "Strand One" principle that the internal affairs of Northern Ireland are for the parties there and the British government alone.
The Conservatives at Westminster have also added to the pressure on Mr Trimble, with a clear signal that they will oppose the creation of the IMB if it restricts the right of a Northern Ireland Secretary to act unilaterally against any party he deems in breach of its commitments.
The British government is anxious to have the IMB appointed in "shadow" form, and an announcement is still expected before the end of the month. Both governments hope that a positive autumn report suggesting that the paramilitary activities defined in the Joint Declaration have been discontinued could significantly improve the political climate and enable Assembly elections to take place. Acknowledging Mr Trimble's difficulties, Whitehall sources say they are confident they can reassure unionists that the creation of the IMB is of no constitutional significance. It is also being stressed that the members of the body - though appointed by them - would be independent of their governments, and that disagreement between the Secretary of State and the IMB would not arise since each would be in receipt of the same intelligence material.
However, the Conservatives appear unconvinced. During a recent meeting of the Northern Ireland Grand Committee, the junior Conservative spokesman, Mr John M. Taylor, asked why the Irish Government would need legislation passed in the Dáil if the IMB was purely advisory and had no implications for British sovereignty.