The €1.1 billion peace programme has been given an impetus with new agreements between the ministers for finance North and South.

The Minister for Finance Mr McCreevy and his counterpart Mr Mark Durkan are hoping that the economies North and South can be given an added impetus through the implementation of the special EU-funded programmes.

In what may be his last meeting as Northern minister for finance before he takes over the mantle of SDLP leadership, Mr Durkan said the so-called Peace 2 initiative which followed on from the old Delors plan should fund projects aiming to give greater access to employment and business as well as community development.

This is the largest of the programmes and is worth €567 million in Northern Ireland and a further €141 million in the Border regions and the Republic. The aim of the programme is "to reinforce progress towards a more peaceful and stable society and to promote reconciliation".

"This is a bottom-up approach. The funding will allow groups to come forward with ideas for projects that will meet their needs," he added.

The priority will be areas that have suffered most in recent years. As a result, Mr Durkan said he expected funding under the so-called urban 2 initiative for groups in north Belfast.

The overall aim, according to Mr Durkan, is to help develop peace and reconciliation and to maximise economic and social benefits on the island and in particular the Border areas.

The governments are also in the process of recruiting further senior management staff to work with the current chief executive Mr John McKinney.

The criteria for this seven-year round of funding to 2007 will be more economic than in the past, according to Mr Durkan. However, he insisted that it would also be more effectively socially targeted.

Some €153 million is allocated to economic renewal. This is to develop the capabilities of local businesses to compete in international markets and to encourage collaboration between businesses.