The Ulster Unionist Party is in negotiations with the British Conservative Party over moves towards a possible merger between the parties.
A joint statement from the party leaders was published on Thursday.
Initially discussions have centred on co-operation over next year's European election.
But the letter has opened the possibility of even greater co-operation in the future.
Initially talks centred on co-operation over next year's European election.
But the conservative leader David Cameron sees the relationship developing much further than that.
A working group made up of leading members from the two parties will discuss whether a merger will take place or whether the two parties should work together in an alliance.
Mr Cameron said: "What I want us to explore with the Ulster Unionists is not really some kind of 'lets have some joint candidates or work together' I want to be more ambitious than that."
"I would like to see us establish a new political force in Northern Ireland that is both Conservative and Unionist, that can say to people, look, get beyond the old politics of constitution or orange or green."
"Let's actually have a national [sic] political party that can stand up for all the people in all of the issues they care about."
"And that people in Northern Ireland who haven't got involved in politics in the past think, yes I can join in, it's a nationwide party, it's part of the conservative movement", he says.
Reg Empey the Ulster Unionist leader says: "Republicans think in terms of generations. Unionists have had the weakness of thinking in the short term. We are trying to think in the long term."
Former Ulster Unionist leader David Trimble is now a senior conservative in the House of Lords, and the UUP's sole MEP is already aligned with the conservatives in Brussels.
The Alliance Party hit out at the move, claiming the Ulster Unionists "were scrabbling around trying to make themselves look relevant".
DUP deputy leader Nigel Dodds said the interests of the union would be best served by a party free to "make judgments on an issue-by-issue basis, at all times putting the interests of the union and unionism first, not the preferences of another political party".
There has also been much discussion recently about increased links between the SDLP and Fianna Fail.
A mid-April meeting in Louth between Fianna Fail and the SDLP brought the issue into the open for the first time, although some in the SDLP would favour a link-up with the Irish Labour Party.
One of the SDLP's most influential members has now come out in favour of the party merging with Fianna Fail.
Patsy McGlone, an assembly member for Mid Ulster, is seen as a possible future party leader.
"Quite clearly, Fianna Fail is representative of the same body, socially and economically, as ourselves, because we have a common inheritance of constitutional republicanism," he said.
"There is a commonality of spirit with the parties in the Republic, but to a greater extent with Fianna Fail."
The link would attempt to present an all-Ireland nationalist alternative to Sinn Fein, which has overtaken the SDLP as the largest party in the Six Counties in recent years.
* The Scottish National Party won a significant by-election victory in Glasgow East on Thursday. With a swing of over 22% to the nationalists, SNP candidate John Mason won for the party in a constituency which is home to Celtic FC soccer team and a large Catholic electorate.
If repeated across Scotland in the next Westminster general election, only one British Labour MP will remain in Scotland. The result has boosted a belief that the nation could achieve independence in a referendum, planned for as early as 2010.