The former taoiseach Albert Reynolds, who has died aged 81, made Northern Ireland his priority when he took office in 1992.

Building on the groundwork laid by his predecessor, and putting the traditional aspiration to a united Ireland to one side, he became one of the main architects of a new dispensation based on agreement and consent.

Alone among political leaders, he welcomed the Hume-Adams talks and sought to include Sinn Féin in the search for a settlement.

“I’m breaking a few rules,” he said. “First, instead of continuing to marginalise these people/ [IRA/Sinn Féin/], I’m going to try to pull them in...they must be shown the benefits of ending the ‘armed struggle’ and going the constitutional road.”

Reynolds also encouraged the involvement of Irish-America and participation of US president Bill Clinton.

His rapport with UK prime minister John Major ensured that the British were brought gradually along the road, and the Downing Street Declaration of 1993 proved to be a milestone in Anglo-Irish relations.

But it was his contribution to the IRA ceasefire in August 1994 that was his greatest achievement. This opened the way for Sinn Féin's participation in the Forum for Peace and Reconciliation in Dublin, a dress rehearsal for all-party talks subsequently convened in Belfast.

Reynolds was often derided for his membership of Fianna Fáil’s “country and western” wing, and being a “one-page man”. He was known to drive a hard bargain, and liked to run his own show - whether in business or politics.

But Mary Holland, a seasoned observer of the Troubles, credited him with almost single-handedly providing the momentum to keep the peace process on course.

”Looking back over the past 25 years,” she wrote in 1994, “it is impossible to imagine any other taoiseach capable of pulling off this outrageous coup de théâtre.”

Born in 1932, he was the youngest of four children of John P. Reynolds and his wife Catherine (née Dillon), and grew up in Rooskey, Co Roscommon. He won a scholarship to Summerhill College, Sligo, and worked at several jobs before joining Bord na Móna. He worked for the company at Ballydermot, CoKildare, where he developed an interest in horse racing.

Next he joined CIE, and was posted to Dromad, Co. Leitrim. He was transferred to Ballymote, Co. Sligo, before finally moving to Longford.

During the mid-1950s he was active in the Rooskey carnival committee, which was established to raise funds to repair the local Catholic church. Funds were raised through an annual dancing carnival, held in a marquee erected for the purpose. The top dancebands of the day were booked and after three years the necessary funds were raised.

Reynolds decided to continue with the carnival on a commercial basis, and later with his brother Jim built a dancehall in Rooskey which could accommodate 2,000 dancers. The Cloudland ballroom became the first of 14 halls operated throughout the country by Reynolds Dancing Ltd. The Longford Arms hotel was the centre of operations.

The growth of the company coincided with the dawn of the showband era and the Reynolds brothers brought leading bands such as the Clipper Carlton, Royal, Miami, Capitol and Dixies to rural Ireland. Dancers turned up in droves.

With business flourishing, Reynolds resigned from CIE in 1961. The brothers booked US acts such as Johnny Cash, Chubby Checker, Roy Orbison and Jim Reeves to tour, and they in turn were supported by local bands such as the Drifters and Mighty Avons.

Another touring act Reynolds booked was Kenny Ball and his Jazzmen, then topping the charts with Midnight in Moscow. Reynolds built his Longford home, Mount Carmel, with his share of the profits from the band's 10-day tour.

When the showbands’ popularity waned, Reynolds introduced bingo to the dancehalls. In 1966 he ended the business relationship with his brother and cut all links with the ballroom chain.

Developing his interest in politics, he was associated with Independent Longford-Westmeath TD Joe Sheridan. At national level he worked with Neil Blaney on various by-election campaigns, helping Des O'Malley win a seat in Limerick.

On the business front, he bought a bacon plant in Dublin's Liberties, and also became involved in exporting fish and seafood. He bought a share in a Longford cinema, invested in a finance company and became publisher of the Longford News. And he was a co-founder of C & D Pet Foods Ltd, which won a lucrative contract to supply pet foods to Sainsburys supermarket chain in the UK. Within a few years he had parted ways with his original partner and became the sole owner.

A renewed interest in the entertainment industry led him to purchase the Showboat, a cabaret venue in Malahide, Co Dublin.

By now a member of the Fianna Fáil national executive, he was a successful candidate in the 1974 local elections. He stood in the 1977 general election, having won the nomination over sitting TD Frank Carter, and became one of four deputies elected for Longford-Westmeath.

Two years later, after Jack Lynch stood down as Fianna Fáil leader, he backed Charles Haughey in the ensuing leadership contest. It was a risk, but one worth taking. He was rewarded with a ministerial appointment and took control of the department of posts of telegraph, with Mark Killilea as minister of state. Transport was added to the portfolio shortly after his appointment.

Inheriting a department flush with money as a result of a major modernisation programme initiated by the previous Fine Gael/Labour coalition government, he proved to be equally adept as an administrator and political communicator.

An enduring folk memory of those days is of Reynolds and Killilea doling out telephone sets from the boot of a Mercedes car.

A bizarre incident occurred in 1981 while he did the honours at a turning-of-the-sod ceremony at Knock airport. He was called away to deal with the crisis that arose following the hijacking of an Aer Lingus plane en route from London to Dublin.

The pilot had been forced to fly to France, where the hijacker, a former Trappist monk, demanded that the third secret of Fatima should be made public.

Reynolds flew to Le Touquet airport and was present when the hijacker was eventually overpowered by French security forces, and passengers and crew were released unharmed.

No less bizarre was an episode at Shannon airport in 1994. Reynolds, now taoiseach, turned up to greet Russian president Boris Yeltsin during a stopover. However, Reynolds, his entourage and a military and were left waiting on the tarmac until they were eventually informed that Yeltsin was "too tired" to disembark..

During the Fianna Fáil government of March-December 1982, Reynolds was promoted to the department of industry and energy. However, time constraints ensured that he made no lasting impression.

But he made good use of his time, quietly building bridges with his colleagues, public servants and journalists. Ever accessible, he was invariably good-tempered and exuded confidence.

At pains to avoid expressing any strong opinions, he steered clear of public controversy, and, significantly, made no enemies. He appeared happy to work in Haughey’s shadow, and defer to Ray MacSharry as the taoiseach’s heir apparent.

Following the 1987 general election Reynolds was given charge of the department of industry and commerce, with instructions to encourage growth and job creation in a climate of severe government cutbacks.

The Beef Tribunal report provides a stark picture of the role he played as he sought to implement Fianna Fáil policy for the rapid expansion of the beef industry. Reduction of red tape was a key element in implementing this policy, and Reynolds admitted to ignoring official advice on many occasions in the drive for growth and foreign markets.

Corner-cutting and risk-taking were almost expected in Haughey’s governments. And Reynolds, as a businessman, had no difficulty with this approach. As he told the Dáil, he was willing to take risks and to invest public money on the basis of a percentage return rather than total guarantee.

He despised the banks’ parsimonious and grudging lending policies, while the innate caution of civil servants frustrated him.

Opportunity beckoned in 1988 when MacSharry resigned as minister for finance to take up the post of EU commissioner. Reynolds was appointed to fill his shoes in finance and was pleased with the reaction to his first budget in January 1989 designed to accelerate the rate of economic expansion.

But his position was undermined when it was claimed that the budget was largely drafted by Haughey. The public slight marked a cooling of the relationship between two men.

This was compounded later that year when following a snap general election Fianna Fáil lacked sufficient seats to remain in office.

Reynolds, one of Fianna Fáil’s negotiators in talks about forming a government, was left swinging in the wind when Haughey dispensed with core values and entered coalition with the Progressive Democrats.

The “temporary little arrangement”, as Reynolds famously called it, was gradually undermined by friction within government, rocked by a ministerial sacking and beset with scandals in the semi-state sector.

The sacking of tánaiste and minister for defence Brian Lenihan, at the PDs' behest, arising from the revelation of phone calls he made to Áras an Uachtarain in 1982, along with his subsequent defeat in the 1990 presidential election were particularly demoralising for Fianna Fáil.

Reynolds was furious when a spokesman for Haughey publicly rebuked him for remarks he had made that were critical of the proposed Programme for Economic and Social Progress.

Then, as allegations of the existence of a golden circle linking business and politics flew thick and fast Fianna Fáil backbencher Seán Power put down a motion of no confidence in Haughey’s leadership.Reynolds was forced to show his hand. The timing was bad and he was ill-prepared. But he committed himself to the challenge and performed with that stubbornness which marked his behaviour on later occasions.

On publicly stating his support for the motion he was sacked from government, followed by Pádraig Flynn, Máire Geohegan-Quinn, Noel Treacy and Michael Smith.

The motion was lost 55 - 22. However, Haughey was not out of the woods yet. His nominee as minister for defence Jim McDaid was forced to decline the nomination after attention was drawn to his involvement in an extradition case concerning an IRA member.

Then, in January 1992, Seán Doherty, appeared on the Nighthawks television programme to say that Haughey was fully aware of the phone-tapping of journalists in 1982.

Haughey decided it was time to quit. Reynolds won the subsequent leadership contest, defeating Mary O'Rourke and Michael Woods. Bertie Ahern had considered standing, but decided not to after remarks from the Reynolds camp about his place of residence; he and his wife had recently separated.

Eight ministers were sacked to allow Reynolds appoint his supporters to government. One minister who asked what he had done to be dismissed was told: “You just backed the wrong horse.”

On taking office Reynolds was immediately confronted with the X case. This went to the Supreme Court, which overturned a High Court decision banning an under-age rape victim from travelling abroad to obtain an abortion. A referendum held later in 1992 resulted in the constitution being amended to take into account the right to travel and freedom of access to information on abortion.

Soon afterwards, however, the coalition fell apart. The breaking point came when Reynolds at the Beef Tribunal effectively called PD leader Des O’Malley a perjurer, and refused to withdraw it.

The result of the November 1992 general election meant that Reynolds had to bite the coalition bullet, and he did a deal with Labour.

The IR£8 billion he brought back from the Edinburgh EU summit helped cement the alliance, although the figure was subsequently revised downwards.

Furthermore, he facilitated the social changes Labour sought: the decriminalisation of homosexuality, the open sale of condoms, the drafting of divorce legislation and, in relation to abortion, the provision of the right to information and travel.

Inevitably, there were difficulties. These included the tax amnesty providing for a mere 15 percent penalty on disclosed untaxed funds, the granting of citizenship to members of the Masri family, who were investors in C & D Pet Foods, and the crisis at Team, the Aer Lingus aircraft maintenance company.

These difficulties posed no threat to the coalition, however, unlike the publication of the Beef Tribunal report. Reynolds sought to manage publication of the findings so that he was presented in the best possible light, while his Labour partners were kept in the dark. It was, as government press secretary Seán Duignan later wrote, a ”full-frontal attempt at a pre-emptive strike which badly boomeranged”.

And it was unnecessary. This newspaper concluded from the report that Reynolds was “fully entitled” to claim that his personal integrity had been vindicated.

But there was a bigger fly in the ointment. Reynolds's appointment of Attorney General Harry Whelehan as president of the High Court was vehemently opposed by Spring and his colleagues. It was Whelehan who, in 1992, successfully applied for a High Court injunction, later overturned, to prevent the girl at the centre of the X case leaving the country for an abortion; he was deemed too conservative.

Reynolds's stubbornness came into play and he refused to budge - even if it meant an election. Then it was made known that no action had been taken in relation to an extradition application from Northern Ireland for the paedophile priest Brendan Smyth, which lay for seven months in the attorney general's office.

It subsequently emerged that there was a precedent for the Smyth case, involving a monk named Duggan. Reynolds told the Dáil that he regretted having appointed Whelehan, who resigned after six days. But Spring had had enough, and he announced Labour’s withdrawal from government.

Reynolds stood down as party leader and was succeeded by Bertie Ahern. Labour joined with Fine Gael and Democratic left to form the Rainbow Coalition, with John Bruton as taoiseach.

Notoriously litigious, Reynolds took a case against the Sunday Times, which he claimed had libelled him in an article headed Goodbye Gombeen Man. He maintained the article, in the UK edition of the paper, was wrong to state the he misled the Dáil in relation to the Whelehan affair.

After a 24-day trial in 1996 Reynolds won a symbolic one penny in compensation. The case gave rise to what became known in English law as the “Reynolds defence” which meant newspapers could print untrue and defamatory information if they could prove it was in the public interest to publish it and that it was the product of responsible journalism.

Reynolds was bitterly disappointed not to secure the Fianna Fáil nomination for the presidential election in 1997. He believed he was shafted by Bertie Ahern who had proposed that his name should go forward in the first place.

One of his proudest moments was to act as Grand Marshal at the St Patrick’s Day Parade in New York in 1998. Among the honours conferred on him was an honorary doctorate of law from the National University of Ireland. He retired from active politics in 2002.

He is survived by his wife Kathleen (née Coen), sons Philip and Albert, daughters Miriam, Emer, Leonie, Cathy and Andrea.