The Tanaiste, Ms Harney, has ruled out the option of an "open door" policy to allow immigrant workers into the State to address the labour shortage. Speaking to The Irish Times this week after introducing a programme to allow nurses and IT and construction professionals into the State, Ms Harney said an "open door" policy would enable employers to drive wages down and displace Irish workers.

"You can't have a situation where, as people come in, they're entitled to work because then have an open door. We can't have a completely open door. We wouldn't be able to cope," said Ms Harney. "Employers would import cheaper labour and displace Irish workers."

Ms Harney said the aim of the new programme was to support the Government's existing policy of seeking some 200,000 new workers in the lifetime of the National Development Plan, which runs until 2006.

She believes an additional 6,000 people can be attracted each year from outside the European Economic Area, which comprises the EU, Norway, Iceland and Switzerland. No limit has been placed on the number of workers permitted to enter the State in the Tanaiste's latest initiative. Meanwhile, IBEC has questioned the logic of the policy. "I didn't see anything in the proposal that indicates that we'll be able to absorb them [new workers] when they get into Dublin and Cork," said the confederation's director of social policy, Mr Brendan Butler.

"The question we're asking is `what does that mean for the entire fabric of Irish infrastructure?' It has the potential to solve the labour shortage, but it also has the potential to affect the quality of life not only of people arriving here, but also the existing population."

In recent weeks, the policy has also been questioned by the ESRI and SIPTU.

For the moment, Ms Harney's scheme is confined to IT and construction professionals and nurses, although an extension to include workers in other sectors has not been ruled out. Ms Harney will establish an advisory group, comprising civil servants, the social partners and development agencies, to review the scheme and recommend on its possible extension in the future.

In theory, about half of the 200,000 people the Government is seeking would be Irish people returning to the State.

Following this week's development, the other half would comprise equal numbers of people in two groups: nationals from European Economic Area states, at all levels in all industries and those from elsewhere at defined levels in certain sectors.

Workers from outside the EU were not previously barred from taking jobs in the Republic. But employers seeking work permits had to prove to the Department of Enterprise, Trade and Employment that a position could not be filled by an EU worker.

This will no longer be the case for nurses and professionals in the IT and construction sectors. While the details have yet to be finalised with the Department of Foreign Affairs, Ms Harney proposes that such workers will be entitled to receive a new category of entry visa when they produce a job offer at an Irish Embassy or Consulate. Outside this group, the old system will still apply.

Ms Harney said the plan was designed to meet a clear need for labour. Some 300 nursing home beds had closed due to a shortage of nurses, she said, and architects, engineers and planners were needed to work on National Development Plan projects.

"If we don't do this, we won't be able to implement the National Development Plan. We won't have the labour to do it unless we have the people in place," she said.

The labour shortage is most acute in the IT sector. The industry is growing rapidly here, but the skills deficit is not confined to the Republic. Experts are needed in all western economies. Britain's Chancellor of the Exchequer, Mr Gordon Brown, eased work permit rules for computer specialists in his budget this month and the US authorities are seeking to increase the number of visas available to IT experts from 115,000 to 200,000. Entry systems in Germany, Sweden and the Netherlands have also been relaxed to attract IT workers.

For all that, a FAS spokesman emphasised this week that vacancies existed in all sectors in the Republic. The spokesman said particular shortages had emerged in the financial services business, in the hotel, catering and tourism trades, and in telemarketing and telesales.

While welcoming Ms Harney's initiative as "timely", the managing director of recruitment specialists the High Skills Pool, Ms Caroline Leacy, said asylum seekers should also be given the right to work. "There is such tightening in the market that we should be looking at giving them work," said Ms Leacy.

But Ms Harney argued that that a Government initiative last summer to give work permits to asylum seekers had not been successful for various reasons. She added that there was still potential to fill vacancies with unemployed people in the Republic and in other EU states.

FAS's current recruitment strategy has two elements. The first is to visit work fairs. The State training agency was in Glasgow yesterday advertising positions and further visits in Britain, Canada and Germany are planned in the medium term. FAS also uses a website - www.fasjobs-ireland.com - to advertise job opportunities and explain logistical matters, such as taxation and the accommodation situation, to potential workers.

Do high relative rates of taxation dissuade people from taking positions in the Republic? Not with returning emigrants, said a FAS spokesman. "Tax has reduced significantly. In 19811990, people would have been paying a lot more by way of taxation."

While the spokesman accepted there was a "serious problem" with spiralling house prices in Dublin and Galway, he said this was not preventing emigrants from returning to the State. However, he accepted that accommodation rental rates in Dublin created problems. "I'm not saying it's not a difficulty. Of course it's a difficulty. We tell them if you want to live in Dublin, that's the bottom line," he said.

This point was emphasised by Ms Leacy. "Dublin is probably at saturation point - property and accommodation-wise. The average wage for the vast majority of people is £15,000." For people thinking of working in Dublin, further questions surrounded the quality of public transport, Ms Leacy said.

Ms Harney accepted that tax rates in the Republic are relatively high. "Obviously we want to continue to drive personal tax rates down," she said.

Asked about the cost of accommodation in Dublin, the Tanaiste accepted that it was high but cited the commitment of the Government and certain companies to regional development. While IDA Ireland said last January that it would redouble its efforts to bring jobs to disadvantaged regions of the State, it said it would take at least three years for the policy to take effect.

FAS has projected that 50,000 new jobs could be created this year. The arrival of an additional 6,000 workers under Ms Harney's plan would make a modest, but not insignificant impact on this. However, bulging jobs supplements in newspapers and anecdotal evidence suggest the demand for labour remains unquenched.

Ms Harney's review group may yet recommend an extension of the latest scheme.