The Government now sees little prospect that the Clinton visit will end the impasse in the peace process, amid concern that the situation may drift into considerable instability in the new year.
After the Taoiseach and the British Prime Minister met for an hour in Nice last night, Government sources indicated that while next week's visit of the US President would "concentrate minds", they did not expect a breakthrough. In particular, the sources believed there was no prospect of any decommissioning gesture in the next week.
Mr Ahern and Mr Blair are attending the EU summit in Nice where French riot police yesterday fought pitched battles in the streets with thousands of demonstrators. The police baton-charged and fired tear-gas at the demonstrators, causing severe disruption throughout the southern French city.
They will have further talks here on Northern Ireland between now and Sunday after what a Government spokesman last night called "a very useful exchange on the outstanding issues involved in the implementation of the Good Friday agreement". Irish and British officials will continue intensive work over the coming days.
The Minister for Foreign Affairs, Mr Cowen, insisted in Nice last night that the Clinton visit did not introduce an "unofficial deadline" into the discussions. "I hope the Clinton visit will advance the discussions", he said, "but it is not a guarantee of success".
Meanwhile in Washington President Clinton's chief foreign policy adviser, Mr Sandy Berger, said Mr Clinton would "not be negotiating current issues" during his Irish visit but would be "contributing to a climate where agreements could be reached".
The talks in Nice centre on reaching a formula that would bring substantial IRA engagement with the de Chastelain decommissioning body, together with an end to the UUP veto on Sinn Fein involvement in meetings of the North-South Ministerial Council.
The pessimistic scenario outlined by some of those close to the talks is linked to the failure to make substantial progress before Christmas on these two key issues.
The fear is that this failure would be followed by another meeting in January of the Ulster Unionist Council, which, in the absence of progress on decommissioning, would hear further demands for a withdrawal of the UUP from the power-sharing Executive.
The Northern Ireland parties would then be gearing up for a UK general election, expected in May. In that situation, the internal unionist competition between the DUP and UUP, and the nationalist contest between the SDLP and Sinn Fein, would make compromise and flexibility even less likely, according to this scenario.
Meanwhile, the Taoiseach and Mr Cowen last night began crucial discussions on EU reform involving important Irish interests.
The talks began at separate informal dinners for heads of government and foreign ministers last night before today entering a formal negotiating phase, which may continue until Sunday morning.
Before last night's dinner, Mr Cowen reiterated Ireland's opposition to moves to introduce majority voting into EU taxation policy.
The Government is also anxious to retain the right to nominate an EU Commissioner. However, Mr Cowen appeared to indicate some flexibility on that issue last night.