Sir Hugh Orde:'The IRA is an organisation. To run it you need money. They need an income stream'

The Monday Interview: Chief Constable, Police Service of Northern Ireland

His day on the beat allowed him to take the temperature in a republican heartland, and to judge how acceptable his service is. "I was with a community sergeant and three other officers. Most people said hello when we said hello. The notion that we are this invading force in republican west Belfast just doesn't add up.

"But not everyone said hello. The sad reflection of that was a kid of eight or nine who just happened to come out of a house as we walked past. No eye contact; we said hello, he didn't. So we're not there yet."

An hour with Sir Hugh, who is in charge of policing and security in Belfast, throws up many examples of how far Northern Ireland has come, but also of the distance it has yet to travel.

The IRA said last year that it was going out of business and decommissioned its arsenal, moves which have facilitated continuing relaxations in security.

The big border watchtowers are coming down, troop levels are at their lowest for 30 years, and soldiers have become a rare sight on the streets. In south Armagh, where the Army for decades resorted to helicopters because of the danger of landmines, police cars now patrol the roads.

Only two or three police districts are allowed to use the Army without permission from an assistant chief constable, said Sir Hugh. "We've got cops driving in parts of south Armagh where there's no memory of cops driving for 35 years. Now they're in liveried vehicles. In Newry, Londonderry, Belfast, there are police on pedal cycles. There are places they are patrolling singly. You hardly see that in London."

But the news is not all good for the man who took charge in Belfast in 2002 after a career with the Metropolitan Police. A range of paramilitary groups, both republican and loyalist, are still active.

The main question, both in policing and political terms, is the behaviour of the IRA, which has vowed to end all its activity. The Government's line has been that progress is being made, but one of Sir Hugh's senior officers said last week that the IRA was still involved in criminal activities.

Can the political and police views be reconciled? The question is of central importance, since Sir Hugh and the Government both want to bring Sinn Fein into policing structures.

They want republicans to join the Northern Ireland Policing Board, and to encourage their supporters to join the police. The general belief is that Sinn Fein will eventually do so, but only as part of a broader settlement establishing a devolved government.

Such a settlement can only happen, however, if the Rev Ian Paisley's Democratic Unionist Party agrees to go into government with Sinn Fein. Mr Paisley's stance is that he will only do that if it is beyond all doubt that the IRA has gone out of business.

The Chief Constable's intelligence and assessment will be the most important element of an official security report, due at the end of the month. He indicates that he believes the republican movement is in transition. "There have been no shootings - no 'punishment' shootings. Now that shows two things: one is the grip of the organisation, that if they want to deliver something they can clearly do it. What we're saying is that that is a green light.

"Things like punishment beatings are almost - almost - non-existent. But we know there have been some, a small number of beatings. And there have been a number of arrests involving big smuggling operations where players have heavy links with the IRA." Clearly, this represents a huge drop in republican activity, but it does not sound like the immaculately clean bill of health the Government has hoped for.

According to Sir Hugh: "The grey area where the debate will inevitably take place is around whether people are doing this on behalf of the organisation or on behalf of themselves. That is going to confuse the issue - it's going to be a difficult year, as this thing shakes out."

But he clearly considers it unrealistic for the IRA simply to vanish in a matter of months. "If anyone seriously thinks that the Provisional IRA is open for business one day and shut the next, and it stops, they're massively underestimating the intelligence of the community," he said. "The IRA is an organisation and no one has said that it, as an organisation, is going away. To run organisations you need money. They need an income stream."

The IRA does not, in any event, seem short of cash, although the security sources say most of its £26m haul from the Northern Bank robbery in Belfast has been rendered useless by changes in the notes. But the security assessment is that it still benefited by between £4m and £5m.

The Chief Constable looks to the future. "What I'm really interested in is trends, indications that things are going in the right direction," he said.

"It's a mixed picture but that doesn't mean that things are not overall going in the right direction. I've never said that the IRA leadership are intent on doing anything other than delivering a peaceful political way forward, rather than a violent way forward." Sir Hugh's pragmatic assessment will encourage many, but the facts as he lays them out are unlikely to persuade Mr Paisley to follow the Government's urgings and make an early deal with republicans.

The CV

* BORN: 27 August 1958

* FAMILY: Married with one son

* EDUCATION: 1984-87: University of Kent

* CAREER:

1977: Joined Metropolitan Police

1982: Sergeant, Brixton

1984: Inspector, Greenwich

1990: Staff Officer to Deputy Assistant Commissioner

1991: Chief Inspector, Hounslow

1993: Superintendent, Territorial Support Group

1995: Detective Chief Superintendent, Major Crimes, South West Area

1998: Commander, Crime, South London

1999: Deputy Assistant Commissioner

2002: Chief Constable, Police Service of Northern Ireland