Confidence in the Northern Ireland peace process has been "undermined" by recent events, Paul Murphy has admitted.

Speaking on Tuesday, the Ulster secretary insisted that confidence would be restored with the ongoing review of the Good Friday agreement and the suspension of activity by paramilitary groups on both the loyalist and republican sides.

Prime ministers Tony Blair and Bertie Ahern will meet in Belfast next week to review progress thus far.

"When we return, the two prime ministers will see all the parties at Hillsborough Castle to see how we can revive the process and also address the issues which are undermining confidence," said Murphy.

"The issues, of course, are continued paramilitary activity and also the stability of the institutions.

"I've got no doubt that people want to see progress in Northern Ireland and not go backwards.

"But at the same time we have to be realistic that confidence has been undermined over the last couple of years and we have to restore that.

"Crucial to that is that we have to reduce paramilitary activity, both on the part of the IRA and also, of course, on the part of loyalist organisations."

The cabinet minister was in Washington, where he was collecting an award on behalf of Tony Blair, in recognition of his work in Northern Ireland.

The annual award from the American Ireland Fund has previously been awarded to former president Bill Clinton, Irish premier Bertie Ahern and former SDLP leader John Hume.