Besides FAA authorization, is an authorization from the local authorities also required ?
Unless the local airspace owner specifically prohibits something (which is very rare(++)) then the privileges are entirely down to the aircraft registry and the pilot's privileges.
This is why nobody in Europe can stop an N-reg plane flown by an FAA PPL/IR holder, IFR in the Class A airways. They would love to stop it (to support their gold plated JAA crap) but they can't.
For example they also can't (currently) stop single pilot jet operations - under FAA you don't generally need a type rating for under 5700kg and you can fly an N-reg Citation in the airways on an FAA PPL/IR. The Euro CAAs really hate this, and tell everybody so quite openly, but they can't stop it without a lot of potential repercussions.
I also don't believe one can read the FARs differently according to JAR or no-JAR. One has to read them exactly as they are written. So if you have
However, when the aircraft is operated within a foreign country, a current pilot license issued by the country in which the aircraft is operated may be used
then that means exactly what it says. If Gary Glitter buys an island, with its own sovereign airspace (very hard to do these days) then he can issue you with a license (handwritten on the back of a fag packet) to fly in his airspace, and that license would satisfy the above FAA requirement for an N-reg.
Incidentally, is an NPPL for G-reg only, or doesn't it say? That's the first thing I would check.
My limited understanding of JAA licensing is that they aren't Eurolicenses (in the sense an FAA licence is a Federal licence valid in all States of America) but a set of 'harmonised' licences issued by individual States (hence the CAA's involvement in UK pilot's JAA licences), so I suspect the interpretation that is correct would be a UK issue JAA licence is ok for UK airspace in an N-reg but not for French Airspace. However, I will need to defer to EuroLawyers who will no doubt provide a more substantive answer.
I don't think the above would be applicable since the FARs use the word "country" and there is no way that UK and France could be regarded as one country.
(++) the common exception to this is the equipment carriage requirements. If the UK CAA mandates an ADF for IFR in CAS, then every plane has to have an ADF in this airspace in the UK, regardless of state of registry. But requirements for additional equipment carriage are a world away from prohibiting certain privileges granted by the registry State. There are I believe some other exceptions connected with max pilot age in jet transports but I know nothing about this.