Northern Ireland secretary Peter Hain has "every expectation" the March deadline for the restoration of the province's assembly will be met.
He added all parties now were now saying they were prepared to share power with each other "for the very first time" and were agreeing to support the police.
Tony Blair cut short his holiday to try and boost devolution talks on Northern Ireland's future yesterday after clashes between unionists and republicans over the police threatened to derail talks in the region, aimed at re-establishing devolved government at Stormont.
Policing in Northern Ireland has long been regarded as one of the thorniest issues standing in the way of the peace process, with assembly elections due to be held in three months time.
However, things were looking positive last month after Sinn Fein agreed to hold a vote on whether to support the Police Service of Northern Ireland (PSNI) after two-thirds of delegates supported leader Gerry Adams' motion.
Sinn Fein has traditionally opposed the PSNI and its predecessor the Royal Ulster Constabulary because of a perceived Protestant bias.
"Let's not miss this historic opportunity by finding reasons to disagree," Mr Hain said on the Today programme.
"There are grass-root republicans as well as DUP members who are unhappy about their party leaderships taking these steps and of course they're going to ruffle the feathers, make all sorts of difficult proposals and points."
He added the DUP was traditionally in favour of devolved policing and justice and this had been the crucial point for Sinn Fein.
"For them, having policing and justice devolved to Northern Ireland, accountable politicians including themselves, is very, very important, as it's important for the government," the Northern Ireland secretary said today.
"I took legislation through parliament earlier this year to implement that precise principle; it's waiting to be picked up by an incoming executive. And the DUP has said it supports the principle and [party leader] Ian Paisley's made that clear again.
"So the issue of the timeframe as to when that can be achieved, we've said that May 2008 is the anticipated date. There has to be delivery on the ground."
Mr Hain said the prime minister had spent "a great deal of time" while on holiday on the phone to Mr Paisley and to Sinn Fein leader Gerry Adams in particular, "trying to find a way of bridging the gap".
But Mr Hain warned all parties that "if either side pull back. . . it could be for many years that Stormont will be shut down".
Yesterday the prime minister said if there was delivery by Sinn Fein of support for the police, courts and rule of law within the timeframe laid out in the St Andrew's agreement, then devolution of policing and justice within that timeframe should occur.
"It is only on this basis and with this clarity that we can proceed to an election. I am confident that both parties want to see progress and will honour their commitments," Mr Blair said.
"But there is no point in proceeding unless there is such clarity."