The Democratic Unionist party (DUP) has withheld judgment on the deal to end the dispute over the post-Brexit Northern Ireland protocol, leaving the fate of power-sharing in the region hanging in the balance. Sir Jeffrey Donaldson welcomed “significant progress” in the UK-EU deal announced on Monday but cautioned that concerns remained and said the party would take time to analyse the text. “In broad terms it is clear that significant progress has been secured across a number of areas while also recognising there remain key issues of concern. There can be no disguising the fact that in some sectors of our economy EU law remains applicable in Northern Ireland.” The party would take time to study the detail and measure the text of the deal against the party’s “seven tests”, Donaldson tweeted. The carefully worded response left the party’s options open and Downing Street guessing over whether it will endorse or oppose the deal. But Ian Paisley – the North Atrim MP and son of the former DUP leader and former first minister with the same first name – delivered a much more critical verdict, telling the BBC journalist Nicholas Watt that the deal “does not cut the mustard”. The DUP response is crucial as it will decide the fate of the Stormont assembly and executive, which have been mothballed since last year by a DUP boycott, and also influence some Conservative MPs in an eventual Westminster vote. Business leaders and most ordinary people in Northern Ireland wish to draw a line under disputes over the protocol but Donaldson is under pressure from hardline DUP factions, and unionist rivals outside the party, to reject any deal that gives Brussels a say over Northern Ireland. Donaldson may try to sell the deal as a victory and validation of the DUP’s boycott, saying it focused minds in London and wrung concessions from the EU. The risk is that rebels in his party will destabilise his leadership. However if the DUP continues its boycott, Stormont, already in mothballs, may wither and die. That would further destabilise the region and force London and Dublin to step in, leaving unionists on the sidelines. Jim Allister, leader of the Traditional Unionist Voice, a small party that has eaten into DUP’s support base, rejected the deal. “The so-called ‘Stormont brake’ is meaningless if, as the PM said, it operates on a cross-community basis, which means it can be vetoed by nationalists and in any event if does not give the assembly the power to stop the imposition of foreign laws,” he said. However Jamie Bryson, an influential loyalist, echoed the DUP in saying he would take time to study the text. “The key constitutional test is whether the Acts of Union is restored,” he tweeted. The Ulster Unionist party leader, Doug Beattie, which opposed Brexit and has pushed for pragmatic solutions to the protocol dispute, said the party would study the text. “We are not here to simply give cover to anyone. We will form our opinion based on whether we believe this is a good deal for Northern Ireland.” Michelle O’Neill, Sinn Féin’s deputy leader, welcomed the conclusion of negotiations between London and Brussels. “I listened to what they said and will now assess the full detail of the agreement, and what effect it will have in practice.”