PROGRESS is being made in attempts to forge a breakthrough in the peace process, the Tanaiste, Mr Spring, has said. But he warned last night that remaining difficulties must not be underestimated.

Speaking to journalists in Dublin after his return from Belfast where he met the Northern Secretary, Sir Patrick Mayhew, yesterday, Mr Spring said the parties were working every hour to make headway.

Asked if he, like the Taoiseach, Mr Bruton, was hopeful that the present initiative emanating from the SDLP leader, Mr John Hume, and the Sinn Fein president, Mr Gerry Adams, would bear fruit, the Tanaiste said "one has to remain hopeful". In the "darkest hour" there was nowhere to go but continue working.

Senior sources in Dublin last night expressed cautious confidence that the gap between the demands of the British government and Sinn Fein for entry to talks was narrowing. A response is still awaited from the British Prime Minister, Mr Major, to the proposals put to him by Mr Hume.

However, republican sources said they had "no idea" how the British government was likely to respond to their draft position which involves no formal waiting period before Sinn Fein could enter talks following an IRA ceasefire.

Meanwhile, there is concern in political circles about the possible exit of US Senator George Mitchell as independent chairman of the multi party talks at Stormont. Mr Mitchell is one of the contenders for the position of Secretary of State in President Clinton's new administration and his leaving Belfast would be seen as a serious loss to the process. It also raises difficulties about who would fill the vacancy.