By Katherine Baldwin

LONDON, March 14 (Reuters) - A deal on power-sharing in Northern Ireland is within reach, Sinn Fein leader Gerry Adams said after talks with the British government on Wednesday.

London and Dublin have given Northern Ireland's parties until March 26 to agree to share power in a local executive or face the indefinite continuation of direct British rule.

After meeting British Prime Minister Tony Blair, who had earlier spoken to leading Protestant politician Ian Paisley, Adams said agreement by the deadline was possible and there was a sense that a new political era was approaching.

Paisley's pro-British Democratic Unionist Party (DUP) strengthened its hold in an election last week for a provincial assembly and is under pressure to share power with Sinn Fein.

"There's a sense here this could be the real breakthrough, after all the conflict, after all the false dawns -- and they had just met with Ian Paisley as well -- that there's a possibility of moving forwards," Adams told reporters.

The prospect of a continuation of direct rule is unpalatable to Sinn Fein, the political ally of the Irish Republican Army (IRA), which ultimately wants a united Ireland.

"I think everyone is working on the broad presumption that there was an election to an assembly with an executive and ... that come March 26 that we will all be there doing the job we were mandated to do," Adams told reporters.

"They know, they can smell it," he added of Blair and his finance minister and presumed successor Gordon Brown who also met Adams on Wednesday.

The election was widely regarded as a test of support for power-sharing. A 1998 peace deal largely ended three decades of violence in which 3,600 people were killed but a lasting political settlement has proved elusive.

While both the DUP and Sinn Fein favour reviving local government in theory, they still do not talk to each other.

Northern Ireland Secretary Peter Hain told parliament the British government would provide "a good financial package" for a Belfast-based executive to run.

"It's very important that the will of the people is respected and that the assembly is up and functioning on the 26th of March," Hain said.

Adams said he was hopeful Brown -- expected to take over from Blair later this year -- would deliver enough funds for a new executive although he did not expect details of a settlement until next week.

He said a British government "will always be reluctant to give as much as it should". But he said: "There certainly is a realisation that this could be it and that they should not be found wanting."

AlertNet news is provided by