At last, the "little room" which has stunted the relationships between the varied peoples of these islands, acutely so in Northern Ireland, is opening up. Witness the recent increasing references to new "institutional architecture", or to a "Council of the Isles" or "British-Irish Council" - now endorsed by the Irish and British governments in their "Heads of Agreement" statement.

A recent editorial in this newspaper cited the Nordic Council linking the Scandinavian countries as a possible model. Such new thinking was given a solid base by the joint statement issued by the Taoiseach and the British Prime Minister in the margins of the European Council in December.

This gave unprecedented recognition to the "unique relationship between Ireland and the United Kingdom stemming from their geographical proximity and shared history and from the resulting close intermingling of people and cultural influences".

This has now found expression in the British-Irish document.

We, with others, have been advancing the possibilities of a Nordic-type inter-island institution to foster such links since the end of 1994. These initiatives led in February 1997 to a round table on the topic at the Finnish Institute in London. It was attended by representatives of the Irish Embassy, the Foreign Office, leading Nordic political scientists, academics from Britain, the Republic and Northern Ireland, and journalists.

The conclusions of the round table were drawn together in a report, Nordic Co-operation: A Possible Model For British-Irish Relations. Its primary finding was that the Nordic countries and the British-Irish archipelago had many common attributes - including being "zones of conflict" over long periods - and inspiration could indeed be drawn from the way the Nordic countries settled their differences for good.

A major factor rendering conflict between the Nordic countries "unthinkable" has been the establishment of an inter-parliamentary Council and its attendant inter-governmental Council of Ministers, set up in 1952 and 1971 respectively. The council fosters close co-operation between Denmark (and its autonomous territories of the Faroes and Greenland); Finland (and its autonomous, demilitarised but Swedish-speaking Aland Islands); Iceland; Norway, and Sweden.

Its common symbol is the eight-winged swan, representing the five nation-states and the three autonomous regions. The council focuses firmly on practical issues and is small and non-bureaucratic. It combines political units as large as Sweden (population 8.6 million) and as small as the Faroe Islands (population 47,000).

Today's sophisticated political form of Nordic co-operation had its genesis in the "Norden [North] Association" - a movement of civil society stemming from the turn of the century which sought peaceful co-operation among the Nordic peoples.

We would point to a parallel in the extraordinary density of civic links between our islands: the British unionist presence in Ireland is complemented by the now eight million or so strong Irish diaspora in Britain; we read each other's major writers; consume each other's popular media (the National Union of Journalists covers both islands) while the interaction in the realm of football and sport can only be explained in terms of common passion. And yet, these myriad movements to and fro have not found real expression at the political level.

This must surely change. We strongly believe that the East-West relationship in Strand Three, appropriately developed, can provide the key to settling the long but by now anachronistic British-Irish conflict.

Strand Three can provide the quid pro quo for significant North-South relations which are needed to persuade Northern nationalists that a worthy settlement is on offer. Only a parallel structure in the East-West dimension will reassure unionists that North-South relations are not a covert slippery slope to a united Ireland.

Nor, given the existing, if low-key, British Irish Inter-Parliamentary Body would we be starting entirely from scratch. The British-Irish document published this week proposes the existing inter-parliamentary tier be augmented by representatives from the regional assemblies to be set up in Scotland and Wales, and from a power-sharing administration in Northern Ireland.

In this way John Hume's recent call for "equality of allegiance" between nationalists and unionists could be assured, while the Republic would not feel so imbalanced by a monolithic, mostly English presence.

This means finding an imaginative and structured institutional form for expressing the reality that the peoples of these islands are - through internal migration and cultural borrowing - "intermingled". Furthermore, in the UK, new Commonwealth settlers and their descendants now number over three million. The significant Chinese community in Northern Ireland is one example.

After initial problems, they are now largely accepted as Black and Asian British, softening the "stiff upper-lip" (as Princess Diana's death showed) and bringing entrepreneurial flair. A richer, more self-confident Republic is also increasingly opening its doors to outsiders, to those fleeing extreme poverty and oppression, with several thousand predicted to arrive in 1998. Not only are we mixed among ourselves - pre-Celt, Celt, Pict, Roman, Angle, Saxon, Dane, Viking, Norman, Huguenot, Jew et cetera - we are now home to a diaspora from many corners of the world.

As island peoples with a long history of association, with over £15 billion of two-way trade, shared English-speaking and Celtic cultures, and many similar legal and political institutions, we should welcome this increasing plurality and interchange. Encouraged by this new openness, and taking a cue from the Scandinavians, we must now rapidly deepen and broaden the debate about new political arrangements between both parts of Ireland and between these islands.

We may, at this historic juncture, be closer than we think to realising Michael Collins's desire for a "free association on all matters which would be naturally the common concern of two nations living so closely together".

Richard Kearney is professor of philosophy at UCD. Simon Partridge is a London-based political writer.