Drumcree Church has been the scene of the protest

The BBC has learned that under the proposals, there would be one more parade but any future march would require the consent of the residents.

The proposed march would bring to an end the protest which began in 1998 at Drumcree Church, when the homeward route of the Orangemen was blocked by the security forces.

Over the years, there has been serious violence directed against the police and Army at Drumcree.

Before any future parade, the Orange Order would agree to a meeting with residents to discuss the parade and any possible protest.

We get all sorts of speculation, year after year in the run-up to Drumcree, and to be honest, there's nothing new in any of this Dr Dara O'Hagan Former Sinn Fein MLA

The order in Portadown believe the meeting should be chaired by the prime minister's Chief of Staff, Jonathan Powell.

However, former Sinn Fein assembly member Dr Dara O'Hagan said on Tuesday she had only seen the proposals in media reports.

"We get all sorts of speculation, year after year in the run-up to Drumcree, and to be honest, there's nothing new in any of this," she said.

"Sinn Fein is in a position where it will support genuine and meaningful dialogue to resolve the issue in Portadown, but the Orange Order need to also take on board the fact that the resolution... may very well involve not having a march down the Garvaghy Road."

Dr O'Hagan said the "fundamental problem" lay with the Orange Order's refusal to speak directly to the residents and to the Northern Ireland Parades' Commission.

Secretary of State Paul Murphy said on Tuesday that he welcomed any initiative which could resolve the long-running dispute.

"At the end of the day, those sort of moves have to be agreed to by both sides locally, and if they can, all well and good," he said.

The proposals - which it is understood the Northern Ireland Office is aware of - do not exclude the possibility of talks between local Orange leaders in Portadown and the residents' leader Breandan MacCionnaith.

In future years, Portadown district lodge would continue to apply to walk its traditional route but accepts that the agreement of the residents would be required.

At the end of the day, those sort of moves have to be agreed to by both sides locally, and if they can, all well and good Paul Murphy Secretary of State

If that consent is withheld, there would be no resumption of the Drumcree protest.

Overall, these proposals suggest one more parade along the Garvaghy Road by members of Portadown district but no further processions without the agreement of the Garvaghy Road Residents Coalition.

It is not yet clear how widely the proposals have been discussed within the Orange Order in Portadown and at higher level within the organisation.

'Shift'

A number of sources told the BBC they believed the proposals, which mark a significant shift in the local Orange position, had come too late to resolve this Sunday's Drumcree parade but said it could be the basis for future discussions.

Mr MacCionnaith said on Monday he had been aware there had been talks between the government and the Orange Order but the Garvaghy residents were excluded.

The Parades Commission has ruled that the parade must not go down the Garvaghy Road after Sunday's church service.

The commission's decision follows objections from nationalist residents and takes account of fears there could be violence.

Last year's parade at Drumcree saw angry confrontations after the march was halted.

The Parades Commission was set up in 1997 to make decisions on whether controversial parades should be restricted.