€1.2bn of exchequer funds to be invested in North

The Government is to pump more than €1.2bn into the North over the next seven years under a massive investment plan, it was revealed today.

It is the first time that taxpayers' money from the Republic will be spent on public infrastructure across the border on such a massive scale.

The funding is earmarked until 2013 for public services such as transport, children's initiatives, housing, social programmes, training, education and enterprise.

The funding is being ploughed into north-south co-operation projects to support the planned resumption of powersharing in Belfast next month.

Last November, the British government also pledged a £50bn (€76.3bn) "peace dividend" fund for the province over the next decade if devolution is restored.

Irish Government officials said the National Development Plan (NDP) funding for the North will be best delivered by locally-elected ministers making decisions as part of a new powersharing administration.

"These funds tackle the long-term challenges that the Irish and British governments agree need to be tackled in the modern global economy," one Government aide said.

Minister for Foreign Affairs Dermot Ahern would not comment on the NDP's "peace dividend" ahead of its publication, but a spokesman said: "Mr Ahern has always particularly stressed the need for investment in infrastructure and communication links in peripheral Border areas.

"Such investment will benefit those who have been economic victims of the Troubles and who were left behind by the economic success south of the Border."

The NDP also envisages the introduction of a Single Electricity Market by November 2007 between the Republic and the North.

Other planned areas of co-operation include a collaboration between the National Spatial Strategy and the Northern Regional Development Strategy, as well as the Institutes of Technology in border areas forming links with their Northern counterparts.