Taoiseach Bertie Ahern accepts that the IRA has ceased criminal activity but insists that Sinn Féin is not yet ready for an Irish government role.
In an exclusive interview with The Irish News, Mr Ahern said Sinn Féin could not enter government in the Republic because as long as the Provisional IRA was still in existence, the party could not subscribe to the Irish constitution.
An IRA statement in July ordered the dumping of arms and was followed by the decommissioning of all weapons but the organisation did not disband.
Mr Ahern said he accepted the IRA's July statement but said as things stood, Sinn Féin could not enter into coalition after the next election, expected in 2007.
The taoiseach said he had insisted that Sinn Féin could not be in government "as long as they were associated with a paramilitary organisation, as long as the Provisional IRA was there, because you couldn't subscribe to Bunreacht na hEireann (the Irish Constitution) and be part of an alternative army".
"If the Independent Monitoring Commission and all the security agencies continues to indicate that paramilitary activities have ceased for good, then that rem-oves that stigma that I put over them," he said.
"Then you get back to normal politics. I know a little bit about how you make a government work to deliver sustainable policies and you can't do that with somebody who fundamentally differs with your policies."
Mr Ahern said he remained "passionately committed" to all aspects of the Good Friday Agreement and remained hopeful that its institutions will up and running by the summer.
"Most people involved in the process believe that if you don't keep going you create a vacuum. Whenever we've had vacuums in Northern Ireland it's been dangerous for everybody," he said.
Foreign affairs minister Dermot Ahern and Secretary of State Peter Hain have already written to the political parties inviting them to take part in a 'stock-taking exercise' in the wake of the IRA's statement and the decommissioning of the organisation's weapons.
Meanwhile Mr Ahern speaking last night (Thursday) rebuked calls to end the special relationship between the state and the Catholic Church in the wake of the Ferns Report.
Progressive Democrat TD Liz O'Donnell said the report should end the ties between the government and the Catholic hierarchy.
While admitting there was disappointment at the report, Mr Ahern defended the church, saying it was owned gratitude for the contribution it had made.