A plan brokered by Mr David Trimble and Mr Mark Durkan to resolve the Holy Cross school dispute has been accepted by loyalist residents but rejected by local nationalists in north Belfast.
The First and Deputy First Ministers put together a £200,000 package which would have involved road realignment and the building of a security wall to protect Protestant houses, talks between the two community groupings, and the agreement of a set of principles to avoid further disputes.
One of the key elements of the deal was to meet nationalist demands for talks with the representatives of the Glenbryn loyalists and, as loyalists were demanding, the building of a security wall to protect a number of Glenbryn houses at the sectarian flashpoint of Alliance Avenue and Ardoyne Road.
It would also have involved realigning the road at the Alliance Avenue and Ardoyne Road junction, which leads on to the Holy Cross school - the scene of a three-month, bitter and sometimes violent protest by loyalists against Catholic children and their parents.
Nationalists said the wall and road realignment would obstruct the line of sight of Catholic children attending the Holy Cross school and consequently they could be vulnerable to attack from loyalists.
Mr Billy Hutchinson, the Progressive Unionist Party MLA for north Belfast, accused nationalists of never having any intention of accepting the Trimble-Durkan proposals.
"They have rejected it because it's a strategy from republicans to make sure Protestants get it tight in north Belfast. It's about driving Protestants out of their homes," he added.
Mr Gerard McGuigan, a representative of the Ardoyne residents, said this was nonsense. He feared loyalists were working to an agenda to close Holy Cross and other Catholic schools in the area.
"We will address the Glenbryn fears if they address our fears," he said.
He agreed that all homes in the area were entitled to protection but said the best way to resolve the issue was through direct talks.
The loyalist grouping countered that the scale of the proposed wall was reduced twice to meet the line of sight requirements of the Holy Cross parents. Mr Mark Coulter, of the Concerned Residents of Upper Ardoyne, expressed "utter disappointment" at the nationalist rejection of the package.
A spokesman for Mr Trimble and Mr Durkan said the responses would be considered before a decision was taken on what to do next. It is unlikely, however, that they would proceed with building the wall in the absence of community agreement.