The British government, represented by Prime Minister Tony Blair at the first session of the British-Irish Council

The British-Irish Council (BIC), also known as the Council of the Isles, is dealt with in Strand Three of the Good Friday Agreement. It emerged as a late entry and was put forward at the request of the unionists to balance the North-South Ministerial Council which the nationalists and republicans wanted. The BIC is 'loosely' based on the model of the Nordic Council that was established in 1952 and includes Denmark, Finland, Iceland, Norway and Sweden together with three autonomous areas, Faeroes and Greenland under the jurisdiction of Denmark and the Aaland Islands which are part of Finland.

The Agreement mandates the BIC to "promote the harmonious and mutually beneficial development of the totality of relationships among the people of these islands", and to exchange information, discuss, consult and use best endeavours to reach agreement on co-operation on matters of mutual interest within the competence of the relevant administrations".

The BIC includes representatives of the British and Irish governments, devolved institutions in Northern Ireland, Scotland and Wales, and representatives of the Isle of Man and the Channel Islands, which includes Jersey and Guernsey.

During the multi-party negotiations on the future of Northern Ireland, the unionists unsuccessfully argued for the North-South Ministerial Council to be subordinate to the British-Irish Council. They failed to win support for this idea and consequently there is no hierarchical relationship between the two. In fact, the text in the Agreement dealing with the North-South Council and the British-Irish Council suggests that the former is more important than the latter. According to the Agreement, the Assembly and the North-South bodies are interdependent-one cannot exist without the other. There is no equivalent interdependence between the British-Irish Council and the Assembly. Under the Agreement, North-South implementation bodies are a legal requirement while the formation of East-West bodies is a voluntary matter. The Irish government responded positively to the new constitutional arrangement between Britain and Ireland by establishing Consulates-General in Edinburgh and Cardiff.

The BIC was established under an international agreement between the UK and the Republic of Ireland. It was signed in Dublin on 8 March 1999 but only took effect on 2 December 1999 when power was devolved from Westminster to the Northern Ireland Assembly.