THE IRA's refusal to hand over any of its arms is overshadowing the cautious optimism in Northern Ireland since last weekend's popular backing for the Good Friday Agreement.

Sinn Fein, the IRA's political wing, indicated again yesterday that the Provisionals would not comply with the growing demands for them to start giving up their weapons.

The Government responded by warning that abandoning guns and bullets was vital if groups linked to violence wanted to become part of the executive of the Northern Ireland assembly which will be elected next month.

The Prime Minister warned last night that the British and Irish governments would ''show no mercy'' to groups carrying on with their terrorist campaigns in Northern Ireland.

US President Bill Clinton has already insisted paramilitaries would find no friends in America if they went back to the bomb and bullet.

In last night's Belfast Telegraph Mr Blair wrote: ''They will find themselves starved of the support they have had in the past - at home and overseas.

''And I can also guarantee that both ourselves and the Irish Government will show no mercy to anyone going back to violence. There will be no fudge between democracy and terror.''

Mr Pat Doherty, Sinn Fein's vice-president, dismissed decommissioning as a ''dead-end issue'' which people should not waste their time pursuing. Anyone seeking to make political capital out of the issue was ''going down a cul-de-sac''.

Glasgow-born Mr Doherty, deputy to Gerry Adams, said decommissioning ''is not the issue. The issue is the document that we voted for on Friday. Let's not be pursuing dead-end issues''.

Mr Adams insisted the increasing focus on arms decommissioning by other parties, the Government and the media was unfair.

''Are the public as informed about the need to disband the RUC? Are they as informed that people voted for David Trimble to talk to our party? Are they as informed on the equality issue? Are they as informed on the need for a gesture of goodwill from the marching Orders?'', asked the Sinn Fein president.

Northern Ireland Political Development Minister Paul Murphy emphasised that decommissioning was an ''indispensable'' part of the Good Friday peace deal endorsed by 71% of voters.

''The Government accepts that there should be proper decommissioning, as does the Irish Government and indeed all the parties who signed up to the agreement,'' Mr Murphy said.

The Minister reiterated the Government's pledge to introduce legislation which will compel terror groups to give up their arsenals or lose their right for their political representatives to take up any seats they might win on the new power-sharing executive.

Details of the legislation would be made public this week, the Northern Ireland Office said.

General John de Chastelain, the Canadian general who jointly heads the international disarmament body, struck a more upbeat note. He voiced confidence that weapons would be handed over by paramilitary groups and that arms would not simply ''rust in the ground''. Allowing weapons to remain in terrorist hands was not good enough, he said.

''I think the concerns of the

people of Northern Ireland are that, if you leave large numbers of weapons in play, no matter how well they are guarded, there is a chance that they will fall into the hands of people who have nothing to do with the political process and no interest in the use of weapons for political reasons, but criminal reasons'', said the general.

Yesterday's exchanges show that decommissioning, or the lack of it, could become a huge

obstacle in the way of real political progress in Northern Ireland in the coming months.

Unionists are horrified at the thought of Mr Adams and his Sinn Fein colleague Martin McGuinness becoming Ministers in the new internal government of Northern Ireland, without the Provisionals first having handed in weapons. While Unionist politicians insist disarmament has to happen, they acknowledge privately that it is almost certain not to happen.

The Good Friday Agreement only binds its signatories, including Sinn Fein, to use their influence to help secure terrorist decommissioning within two years of the assembly starting up. Sinn Fein argues that it has no guns and should not be punished.

Meanwhile, John Hume's moderate SDLP rejected Sinn Fein's invitation to forge a joint nationalist electoral pact for next month's assembly elections.

Anne Simpson Page 17