A damaging conflict has arisen between the Taoiseach and the British Prime Minister over whether Sinn Fein is now a separate organisation from the IRA.
Mr Ahern said yesterday that Sinn Fein and the IRA were "two separate organisations" but senior police sources on both sides of the Border last night supported Mr Tony Blair's view that the two organisations are "inextricably linked".
Both Garda and RUC sources told The Irish Times last night that a number of senior Sinn Fein figures are members of the Provisional IRA army council.
A meeting of the IRA leadership to decide its reaction to The Way Forward proposals, published by the two governments on Friday, is believed to be imminent.
Meetings of local IRA groups have been taking place and gardai were last night anticipating a meeting of the IRA's leadership either late last night or tonight.
There was also some anticipation that the IRA might issue a statement indicating its response to the proposal that it should decommission weapons in order to enable Sinn Fein's entry Fein enter a Northern executive. The statement could be made by the weekend.
With a week to go to the deadline for the establishment of the executive, the difference between Mr Blair and Mr Ahern over Sinn Fein's standing visa-vis the IRA threatens to inflict serious damage on the two governments' efforts to get unionists to accept the latest political initiative.
The whole thrust of The Way Forward paper is based on the premise that Sinn Fein will convince the IRA to begin and end the process of decommissioning of arms by May 2000.
In an interview with BBC's Good Morning Ulster programme yesterday, Mr Ahern said: "I noticed last week that all the parties believe that even though we used to say Sinn Fein-IRA - I said they were the opposite sides of the same coin, I think I was the one who made that statement back in about 1990 - the situation now is that they're two separate organisations."
He repeated this view in a briefing with journalists at the ICTU conference in Killarney later in the day, when he said that in the past, he had believed that the IRA and Sinn Fein were "opposite sides of the one coin" but this was no longer the case. That was why the IRA had to make its position clear, he said.
"All my negotiation has been with Sinn Fein, not the IRA," the Taoiseach continued. He called on the IRA leadership to "cross the Rubicon" and make a statement on decommissioning.
The Ulster Unionist Party's chief negotiator, Sir Reg Empey, said the Taoiseach's statement would be regarded by most people in the North as "absolute nonsense - it's like saying that the earth is flat".
Sir Reg said Mr Ahern was "teeing things up for later in the summer" when, if the Northern executive were to go ahead, and the IRA were to default on decommissioning, Sinn Fein would be allowed to continue in government.
Mr Blair said on BBC's Question Time last night that Sinn Fein spoke for the IRA on disarmament but although the organisations were not exactly the same "they are inextricably linked together. The republican movement is effectively one movement - I mean let's not beat around the bush on this. There's no doubt at all that they work and operate very closely together."
Asked if Sinn Fein should remain in the executive if the IRA did not begin to decommission, Mr Blair said: "I believe the answer to that is `no' if they are holding a private army in reserve."
The senior Sinn Fein figures who are members of the army council of the IRA include, according to Garda and RUC sources, well-known Sinn Fein figures from Belfast, Derry and Co Kerry - with possibly a fourth person from Donegal.
The non-Sinn Fein members of the IRA army council are said to be a Belfast man in his 50s who served a lengthy jail sentence in Britain, another Belfast man who directed the IRA's commercial bombing campaign in the city in the early 1990s and a south Armagh farmer.
While Sinn Fein has grown in size and has developed its own structure it is still a highly disciplined and secretive organisation which republicans still regard as being under the control of the IRA leadership.
Downing Street last night denied there was a rift between London and Dublin following the Prime Minister's comments.
The Sinn Fein chairman, Mr Mitchel McLaughlin, said yesterday an IRA statement on decommissioning would be "not necessarily negative" but no different from the position it stated last March, the Press Association reported. "We are saying we believe we could convince them to decommission by May 2000. That is a huge gamble for us," he said.