The UUP rejected the move in a key vote in the Assembly this week, though the measures were carried with the combined votes of the Democratic Unionists, Sinn Fein and smaller parties. But after senior American political figures had privately tried to persuade the Ulster Unionists towards a "yes" vote, the US envoy Declan Kelly defended the right of parties to vote with their conscience.

Mr Kelly told the Northern Ireland Assembly and Business Trust President's Dinner at Parliament Buildings in Stormont that major efforts were under way to attract new jobs to the region, but in the wake of the recent devolution controversy he praised the overall efforts to bolster the peace process.

Both US Secretary of State Hillary Clinton and former President George Bush contacted the UUP and their political allies in the Conservative Party in efforts to have Ulster Unionists vote in favour of the devolution of law and order powers, which are being introduced in line with the recent Hillsborough agreement.

Mr Kelly said: "We recognise that in the past several days there have been difficult decisions to be made by all the parties involved and we respect the rights of every party to make the decisions it deemed necessary.

"The important thing is that democracy again functioned here in this region and in this Assembly as it should, and people were able to make decisions based on the principle of majority whilst also respecting the rights of everyone to voice their opinion and cast their vote in whatever way they deemed appropriate.

"I am certain that every one of you shares a commitment towards building a bright economic future for this wonderful region. You can honour that commitment while also preserving the integrity of your institutions and how they should function. And you have done so this week yet again. To quote Gandhi: 'Honest disagreement is often a good sign of progress'. We have witnessed this first-hand over the last several weeks."

He added: "Together, you must continue to resolve your differences and continue on the positive road towards a future of peace and economic prosperity. Simply put, as I hope to underline in my remarks tonight, the prize for Northern Ireland is simply too big to even contemplate doing otherwise."

Mr Kelly said he brought a message of congratulations from the American government, especially President Barack Obama and Mrs Clinton, on the passing of the devolution measures this week which pave the way for the transfer of law and order powers from Westminster by April 12.

Speaking ahead of St Patrick's Day events in Washington next week where First Minister Peter Robinson and deputy First Minister Martin McGuinness will meet President Obama, Mr Kelly said Northern Ireland was well placed to secure economic, as well as political progress, in the months and years ahead.