The DUP's Assembly group was called to Stormont for a private update on progress in the closely guarded negotiations with Sinn Fein on the devolution of policing and justice powers, a DUP source confirmed.

Amid mounting speculation that agreement could be reached on the vexed issue, thereby averting a collapse in the power-sharing government, the man tipped to be the future Justice Minister under the plan said the result of the talks will define politics in the region for years to come.

Alliance party leader David Ford said an agreement on the transfer of law and order responsibilities from Westminster would bring much needed stability to the power-sharing institutions and the country as a whole. Mr Ford, whose party is seen as the only grouping that could command cross-community support, stressed the importance of achieving a deal as Sinn Fein and the DUP continue marathon negotiations inside Stormont Castle. The two main parties were locked in exchanges throughout the week, sparking speculation that a breakthrough is imminent.

"Talks are at an extremely important stage and I believe that the coming days will define politics in Northern Ireland for years to come," said Mr Ford.

"It looks as if the DUP and Sinn Fein are finally engaging seriously on some of the crucial issues that have divided them and blocked progress. Northern Ireland needs stability - we need a genuinely shared future and a new Justice Department with agreed policies which allow it to deliver for everyone from day one."

On Thursday night, the under pressure DUP leader Peter Robinson rejoined the talks, which are aimed at resolving outstanding issues that have delayed devolution, such as how contentious Orange parades are managed. His arrival at Stormont Castle marked his first public appearance since announcing on Monday he was temporarily stepping down as First Minister to deal with the fall-out from the sex and money scandal that destroyed the political career of his wife Iris and threatens his.

Mr Robinson is facing a series of official probes after claims he should have revealed his wife's failure to declare £50,000 she obtained from two wealthy developers to set her teenage lover up in business. He vehemently denies any wrongdoing.

The revelations, which forced Mrs Robinson to resign as MP, MLA and councillor, broke at a critical juncture for the fragile power-sharing administration, with the long-running row over the delay in transferring law and order powers from Westminster threatening to bring down the institutions.

But the crisis appeared to focus minds within the DUP who are said to be making progress in the closely guarded talks with the republicans.