Despite four days of intensive negotiations, the Ulster Unionists and Sinn Fein were unable to agree on a formula to end the deadlock, delaying the transfer of legislative powers from London to Belfast.

British Prime Minister Tony Blair and Ireland's Prime Minister Bertie Ahern planned today to assess a report by the head of the international decommissioning body, General John de Chastelain, and papers submitted by all sides involved at castle buildings.

They will then make a statement outlining what they believe is the best way forward. It could mean putting the process on hold, probably until the autumn.

A deal would have cleared the way for the setting up of a power-sharing executive in charge of a new administration.

Further delay would be a major blow to Blair's unprecedented effort to find a settlementin Northern Ireland, but his official spokesman made it clear London and Dublin are not without hope.

He said: ``We know where the parties are and as I said before, we do not believe the gap is unbridgeable.''

The Prime Minister had a 20-minute telephone conversation with US President Bill Clinton following the adjournment of talks at Stormont Castle.

Blair briefed the President on the way the talks had progressed through the day, said the Prime Minister's spokesman.

He told him there was now ``a very positive mood and the real possibility of an agreement'' to take the process forward.

Clinton is ready to intervene in the deadlocked peace process if he is asked, White House spokesman Joe Lockhart said.

The mood of the talks was ``reasonably optimistic'', Clinton said, and both parties were exploring new ideas. Though the talks were very difficult, it would be very hard for the world to understand if they were broken off without success.

``If it falls apart over sequencing, it would be more thana tragedy,'' Clinton said during a news conference.

Lockhart said Clinton had been in constant contact with he British Prime Minister had spoken several times by phone with Protestant Unionist leader David Trimble and Catholic Republican leader Gerry Adams.