The SDLP deputy leader, Mr Seamus Mallon, has said it is "absolutely wrong and dishonest" for Sinn Fein to claim that the new assembly under discussion at allparty negotiations represents a threatened return to Stormont.
Republicans are expressing grave reservations about the Strand One talks which centre on new internal arrangements for the North. They have alleged that a return to "50 years of unionist misrule" is on the agenda.
However, Mr Mallon said: "Does anyone seriously imagine that the SDLP or the Irish Government would agree to the creation of a new Stormont? How daft can they get? They are totally misrepresenting the type of body which we are currently talking about.
"Rather than being something which will work against nationalists, what is on offer is the opportunity to create a body which will give nationalists, for the first time, a share of the executive power in the North of Ireland. It would be something absolutely new.
"There is the opportunity for them to have power over the things which affect their lives - education, agriculture and roads. Are Sinn Fein opposed to this? Maybe they would prefer British ministers to have this power instead?"
Mr Mallon said Sinn Fein was "absolutely wrong and dishonest" in its claims that the Strand One negotiations would lead to a return to a pre-1972 situation before the British government introduced direct rule.
He urged republicans to unite with his party and the Government at the talks to create the "necessary checks and balances" for a new assembly.
He also said no one should be surprised that an assembly was under discussion. Such a body was in accordance with the 1995 Framework Document and with the 1993 Hume-Adams agreement which stated that the right of self-determination of the Irish people as a whole must be exercised with the agreement and consent of the people of Northern Ireland.
Meanwhile, the DUP has reacted angrily to comments by the Northern Secretary, Dr Mo Mowlam, that peace settlement referendums, North and South, would carry equal weight. Mr Dodds said: "This latest statement of the Secretary of State will reinforce unionist opposition to the current republican-based talks process.
"She is saying that the voters of the Irish Republic will have equal status when it comes to deciding how the future of this part of the UK is to be governed. This is an astonishing admission of how far she is prepared to go to abandon British sovereignty over Northern Ireland."
Mr Ian Paisley jnr of the DUP said: "We reject any attempt to link the future of Northern Ireland to a vote in the Republic."
The Ulster Democratic Party, the UDA's political wing, expressed similar sentiments. Its press officer, Mr David Adams, said a poll in the Republic could not have equal status with one in Northern Ireland.
However, the Ulster Unionist deputy leader, Mr John Taylor, said he did not believe a problem existed. The referendums would be very different, with the one in the Republic asking the electorate to abandon Articles Two and Three.
The SDLP yesterday met the Confederation of British Industry in the North. The party's economic spokesman, Mr Sean Farren, told the CBI that resolving economic inequalities must be a central part of any agreement.