Tony Blair's former chief of staff, Jonathan Powell, claimed the DUP set up contacts with Sinn Fein after it became the largest unionist party following the Assembly elections of November 2003.

In the latest extract from his memoirs, published today, Mr Powell added: " The channel was kept secret because the DUP refused to meet Sinn Fein at the time on the grounds that the IRA was still active."

Without the back channel building confidence over time, the " extraordinary" meeting between Ian Paisley and Gerry Adams last March " would have been difficult," Mr Powell told the Guardian newpaper.

But DUP deputy leader Peter Robinson said today: "There was no back channel to Sinn Fein at all, not at any point (before March last year).

"There is plenty of evidence that was the case, with Sinn Fein coming out of Downing Street drawing different conclusions from us about what the Government was saying.

"The meeting he (Mr Powell) is referring to was when three of us (Mr Robinson, Nigel Dodds and Ian Paisley Jnr) were sanctioned by the party executive to meet Sinn Fein on (Saturday) March 24.

"Up until that day we had never had any meeting, under any guise. I had never spoken to Sinn Fein, never met Sinn Fein, until that day."

Mr Robinson, the prospective next First Minister when Ian Paisley stands down in May, reiterated that Mr Paisley had publicly made clear that any DUP member having contact with Sinn Fein would be expelled from the party.

A spokesman for Sinn Fein said today it was making no comment on Mr Powell's account, the first by a senior British official during the crucial Blair years.

Mr Powell commented, however: "They (the DUP) were no different from the British government at the time of John Major or Margaret Thatcher saying

they never had contacts with the IRA - but actually [they were] doing so as well.

"It did play an important role in making possible that extraordinary meeting between Ian Paisley and Gerry Adams. They had never met, they had never spoken until they sat down for that photo-opportunity in March 2007. If you hadn't had that back channel building confidence over time, it would have been difficult."

Mr Powell also revealed more details about links between Downing Street and the IRA in existence from 1973.

His book Great Hatred, Little Room, also gives the inside track on No 10's tactics during the peace negotiations.

"It is very hard for democratic governments to admit to talking to terrorist groups while those groups are still killing innocent people.

"Luckily for this process, the British government's back channel to the Provisional IRA had been in existence whenever required from 1973 onwards."

Londonderry businessman Brendan Duddy, a pacifist, was driven by the violence that surrounded him to talk to both sides and was the key player in secret negotiations for decades, Powell said.

"When Stormont collapsed [in 1972] a diverse collection of home civil servants, diplomats and spooks was sent out to try and make sense of the place.

"One of these was a remarkable Secret Intelligence Service (SIS) officer, Frank Steele who made it his job to get out into Catholic ghettos like the Falls Road in Belfast and the Bogside in Derry and to make contacts at all levels.

"Eventually he was able to get in touch with Provisional IRA leaders and suggest they come to London to see Willie Whitelaw [the first Secretary of State] in 1972.

"When Steele left Northern Ireland in May 1973, his contacts were inheritedby his successor, another SIS officer, Michael Oatley, a subtle and independent-minded intelligence operative who within a few months of his arrival managed to develop connections with and around the IRA leadership to see whether it might be encouraged in the direction of political activity."