THE BRITISH and Irish governments were last night struggling to steer the Irish peace process through one of its most precarious phases, as political and paramilitary pressure combined to increase instability.

London and Dublin are facing worrying signs that the ceasefires of both the IRA and the Ulster Volunteer Force, one of the largest of the loyalist groupings, are fraying. "Punishment" beatings continue apace, splinter groups on both sides appear to represent a growing danger and a court case in Ireland has given the credibility of the process a hard knock.

A political firestorm has developed over the decision of the prosecution to drop charges of murder against four men accused of the 1996 IRA killing of Irish detective Jerry McCabe. The prosecution agreed instead to accept guilty pleas to the lesser charge of manslaughter.

One of Dublin's main daily newspapers expressed "dismay, bafflement and outrage" at the move.

In the north, the IRA's admission that some of its guns had been taken by defectors from the Real IRA, the splinter group responsible for the Omagh bombing, has placed a question-mark over the stability of the organisation.

This threat was underlined last night in a Channel 4 interview with former prisoner Brendan McClenaghan, who says he supports Republican Sinn Fein, which is regarded as the political wing of another splinter group, Continuity IRA.

Asked if he could imagine the Continuity IRA setting off bombs in London, he said: "Nothing has changed much to suggest to me that it isn't a possibility that something like that could happen again."

There are also reports that the UVF has smuggled in a new consignment of weapons. At the same time, splinter groupsstyling themselves "Red Hand Defenders" and "Orange Volunteers" have been carrying out petrol- bomb attacks on Catholic homes.