The Anglo-Irish Agreement was presented by both heads of government as a foundation stone on which a lasting settlement could be built. Unionists, however, saw it as an act of treachery by the Thatcher government because they were not consulted.
In effect, the Anglo-Irish Agreement created a stalemate in Northern Ireland politics for the next five years.
The most important feature of the Agreement was the establishment of an intergovernmental conference to be headed by the UK Northern Ireland secretary and the Irish Foreign Minister. It was to meet regularly to discuss matters of 'common concern' and was to have its own cadre of civil servants from both sides of the border.
The Agreement marked a change in attitude for Margaret Thatcher. Like Irish Prime Minister Garret Fitzgerald, she believed a cross-border body might stem a rise in electoral support for Sinn Fein and lessen republican violence.
Only the SDLP wholeheartedly supported the plan. Sinn Fein leader Gerry Adams said it "copper-fastened partition and Dublin's recognition of the Northern Ireland state".
Unionists were even more incensed. Just a week after the Agreement was signed, 100,000 of them gathered to demonstrate at Belfast City Hall. On 17 December all 15 Unionist MPs resigned from their seats forcing by-elections to highlight Protestant opposition to the Agreement. A "day of action" was declared 3 March 1986 which closed down much of Northern Ireland's industry and commerce.
The Assembly was dissolved in June 1986. Unionists refused to consider any form of negotiation with nationalists because they said it undermined constitutional guarantee given by successive British governments.