Three of the four parties in the Northern Ireland Assembly voted in favour of creating a new locally-run Justice Department.

It will take over responsibility for the territory's police and courts from Westminster next month.

But the Ulster Unionists (UUP) rejected the painstakingly-negotiated step, despite lobbying from British and Irish officials as well as former US president George W Bush.

Prime Minister Gordon Brown has welcomed the Assembly's decision.

"The completion of devolution, supported by all sections of the community in Northern Ireland, is the final end to decades of strife.

"It sends the most powerful message to those who would return to violence: that democracy and tolerance will prevail."

Ireland's prime minister Brian Cowen described it as "a historic day".

Democratic Unionist leader and Northern Ireland first minister Peter Robinson attacked the UUP decision to vote against the devolution plans.

He said the party was seeking political advantage and added: "I believe it is time for us all to move forward. There must be no going back to the bad old days of the past.

"Throughout history there are times of challenge and defining moments. This is such a time. This is such a moment."

The UUP claimed the ministerial Executive must sort out other outstanding matters - such as the longstanding row over post-primary school transfer arrangements - before it can take on law and order functions.

Its leader Sir Reg Empey said: "As a democratic political party pledged to making power-sharing work in an inclusive manner for all the people of Northern Ireland... and we exercise our rights refusing to bow to the blackmail and bullying to which we have been subjected in recent weeks."

But deputy first minister Martin McGuinness questioned the logic of the UUP stance.

"The UUP are on record as stating that they will not support the election of a local minister to oversee the administration of policing and justice until there is agreement to test 10 and 11-year-old children to determine which school they will attend," he said.

"I have to say that these are the most dysfunctional political positions I have ever come across."