LEEDS CASTLE (AFP) - Crucial talks aimed at restoring home rule for Northern Ireland ended in failure, as Catholic parties and government sources blamed hardline Protestants for "choking" the deal.

But British Prime Minister Tony Blair and Bertie Ahern, his Irish counterpart, stressed that for the first time they saw a possible end to the outlawed paramilitary Irish Republican Army (IRA).

"Subject to a satisfactory outcome to these consultations, we can finally and at long last resolve the issue of arms in the politics of Northern Ireland," Blair and Ahern said in a joint statement Saturday.

But despite three days of intensive negotiations, "there is however not yet comprehensive agreement" on the issues that are key to reviving the power-sharing government in the province, Blair told journalists at the close of the talks.

The prime ministers, joined by top diplomats and US envoy Mitchell Reiss, spent three days at Leeds Castle, a picturesque southeast England estate, trying to overcome the divisions that led to the suspension of the Northern Ireland government two years ago.

"We've basically resolved the contours of the paramilitary question, but we've still got to make sure that whatever changes that are made to institutional structures, that they are acceptable to all parties," Blair said.

By multiple accounts from inside Leeds Castle, the IRA was prepared to make a major concession offer on disarmament, with some saying a statement explaining how the weapons would be destroyed had been drafted.

"There was a 'form of words'," a source from the moderate nationalist Social Democratic and Labour Party (SDLP) told AFP>.

"I think that progress was made on a range of issues," Sinn Fein leader Gerry Adams said. "My strong view is that the IRA is not the problem."

While leaders tried to put a positive spin on the summit, saying it had set out the remaining points of division, most blamed the Democratic Unionist Party (DUP) for its ultimate failure with their demands to overhaul the 1998 Good Friday peace agreement.

Ian Paisley, the 78-year-old firebrand leader of the DUP, said the party needed more proof of any IRA commitment to disarm. "I am too old to be bluffed. We will believe it when we see it, and we're going no farther than that."

"The DUP didn't negotiate, they didn't talk to us," Adams told journalists.

"All we heard from the DUP is 'no, no, no'," added Alasdair McDonnell, number two at the moderate nationalist Social Democratic and Labour Party (SDLP).

Demanding changes to the Northern Ireland government institutions "was the DUP mechanism for choking off any deal," McDonnell said.

Even Irish government sources said Paisley's team did not budge from their positions, while a British government source said Blair had been furious at the party's intransigence.

However, David Trimble, former first minister and head of the minority Ulster Unionists (UUP), said the DUP, long opposed to the Good Friday pact, was "increasingly buying into it".

The DUP wants to see Northern Ireland's assembly vote by majority rule on all aspects of government -- a move that would break the cross-community system of checks and balances, and give the Protestant party a grip on ministerial posts.

"They want a veto over everything," said Sinn Fein's Alex Maskey.

The meeting, which began with a mood of guarded optimism under the sunny skies on Thursday, had to wind up beneath storm clouds at noon on Saturday to make way for a private wedding at Leeds Castle.

The venue was the place where Middle East diplomats paved the way for their historic Camp David peace pact 25 years ago.