By Mark Devenport BBC Northern Ireland political editor

As far as the Northern Ireland Office is concerned, John Steele is about as safe a pair of hands as you can get.

A retired senior civil servant, Mr Steele has been, amongst other things, the Northern Ireland Office's security director, the head of the prison service and the director of the court service.

As such, he was privy to top secret intelligence about paramilitary intentions and structures and he needs no lessons on the vital role that the jails have played in both loyalist and republican history.

Achieving "special" or "political" status enabled paramilitaries to consolidate their discipline and strategy both inside and outside prison.

The IRA's cell structure, for example, was developed in large part by the think-tank formed by its "men behind the wire".

The removal of that status was intended to break the grip of the paramilitaries on the prisons.

Protests have been staged at Maghaberry Prison

Instead, it led to the IRA hunger strikes of the early 1980s which in turn proved the springboard for the inexorable rise of Sinn Fein to political prominence.

Now an old ghost has returned to haunt the Northern Ireland Prison Service.

A new demand for segregation, initiated by dissident republicans, has spread to loyalists.

Ostensibly the campaign is all about safety. But officials appear highly dubious about some recent reports of violent clashes between the different factions inside Maghaberry jail.

They suspect that the demand for separation is, at least, as much about paramilitary groups wishing to exert control, as it concerns individual inmates seeking assurances over their personal safety.

The dispute leaves the authorities stuck between a rock and a hard place.

If they accede to the demand for segregation, they could turn the clock back inside the prisons and provide paramilitary jail commanders with fresh credibility and authority.

If they refuse to budge, they risk an increasingly serious wave of unrest - unrest which has already included rooftop demonstrations and dirty protests.

The ultimate nightmare - a hunger strike - cannot, presumably, be completely ruled out.

Given the sensitivities surrounding segregation, whatever decisions ministers take could have negative repercussions

With this in mind, politicians do not appear too dogmatic on this score.

Sinn Fein is supporting segregation, both for historic reasons and because it feels it must guard its flank against the dissidents.

The SDLP says safety must be paramount.

Even the DUP's representative on the Policing Board, Sammy Wilson, who is normally guaranteed to bang the drum for law and order, told the BBC's "Inside Politics" programme that continuing integration was a "recipe for disaster".

He favours a pragmatic approach in which loyalists and republicans are physically separated but the authorities move individual prisoners around regularly to prevent paramilitary organisations gaining control of particular wings.

Pragmatism is where John Steele comes in. He has been tasked, together with two former prison chaplains, to review the safety of both staff and prisoners at Maghaberry jail.

The Steele review should be sitting on Paul Murphy's desk when the secretary of state returns from his summer break.

Mr Steele will no doubt bear the potential consequences both inside and outside the jail in mind when formulating his proposals for improved conditions.

However, it will still be up to the government to decide what to implement and when.

Given the sensitivities surrounding segregation, whatever decisions ministers take could have negative repercussions.