German authorities have said the extradition of Roisin McAliskey on terrorist charges will be the subject of "political negotiations" that will take the Northern Ireland peace process into account.
This concession follows a call by Martin McGuinness, the Sinn Féin deputy first minister, for Germany to drop the proceedings. McAliskey was arrested at her home in Coalisland, Co Tyrone last month and was granted bail.
"I expect there is going to be a hearing on Wednesday," the German embassy in London said. "The courts have to decide how to react to the German request and, meanwhile, there are political talks between the British and German side on how to deal with this thing."
The embassy added: "We are in this awkward dilemma of having to follow up on a criminal act based on German criminal law and acknowledging the political aspect of this case. That is why we want to play along and that is why we said, 'Yes, of course we can set her free on bail'."
McAliskey, 35, is a daughter of Bernadette, a former MP and civil rights activist. She is wanted for her alleged role in an IRA assault on Quebec barracks, a British army base in Osnabrück, in June 1996. Three mortars were fired at the barracks from the back of a van. One exploded, damaging several buildings.
Last October the prosecutor's office at Karlsruhe issued a European arrest warrant for McAliskey, but it was not executed until last month. Under the procedure the requesting country does not have to specify the evidence it has. It is known from a previous extradition attempt, however, that McAliskey was allegedly seen by witnesses with members of an IRA gang at a house near Bremen. A search of rubbish bins is said to have revealed the remains of "a torn, unmarked plastic bag" bearing fingerprints belonging to her.
McAliskey supporters in Belfast have released copies of a photofit picture they say was distributed by the German authorities after the attack. They say the image bore "a passing resemblance to the actress Goldie Hawn, but none at all to Roisin McAliskey".
German prosecutors have also said that forensic examination of a handwritten note given to the daughter of the landlord by one of the female members of the group matches McAliskey's "to a high possibility".
The prosecution of all those involved in the attack has been highly politicised. In the case of McAliskey, the German embassy specifically agreed that she could be released on bail.
"We understand the situation in Northern Ireland," said an embassy official. "The arrest warrant was issued in October 2006 when such political ideas and concerns were not in the foreground. For us it came as a surprise that the arrests were executed one or two weeks after the Northern Irish government had established itself."
In 2003, Michael Dickson, a Scots-born former British soldier who organised the attack, was arrested in the Czech Republic and extradited to Germany. A court in Celle sentenced him to six years for attempted murder and causing an explosion. He was freed in March 2006 after serving 27 months.
Leonard Hardy, 45, another member of the gang, was arrested while on holidays in Torremolinos and extradited to Germany for his part in the attack. Hardy, who is from north Belfast but lives in Co Louth, received a six-year sentence in the same court after admitting charges of attempted murder in connection with the attack.
He was never required to serve the sentence. Instead he was released within days of Dickson. The suspicion now is that a similar deal may be brokered for McAliskey.
A previous attempt to extradite her failed after political pressure in 1998. McAliskey was pregnant when she was arrested on foot of the German warrant. She gave birth while detained in a British prison and suffered post-natal depression. She was released when Jack Straw, the home secretary, ruled that she was too ill to be extradited and the Crown Prosecution Service held there was insufficient evidence to try her in Britain.
The German authorities also attempted to extradite James Corry, a former actor, in relation to the attack on Quebec barracks. The Irish government rejected an extradition request for Corry, on the grounds that no arrangements were in place with Germany, which does not extradite its own citizens.
Garda sources said that the Osnabruck investigation wound down when the IRA declared its second ceasefire in 1997. They believe a Dublin man, now living in Spain, was the mastermind behind the IRA's attacks on British bases in Germany.
Last week The Sunday Times requested disclosure of documents relating to the McAliskey case and a hearing has been arranged for next week in order to give the German government and her lawyers time to respond.
Mr Justice Burgess said: "The court has been advised by the legal representatives of Ms McAliskey that they will be seeking further time to comply with the directions of the court."