The Government is considering regionalisation - breaking up the State for EU purposes - in an attempt to allow poorer areas to continue to qualify for EU funds, the Minister of State at the Department of Finance, Mr Martin Cullen, said yesterday.

Speaking in the Seanad, Mr Cullen said the possibility of Ireland going down the route to regionalisation had been raised at both political and official level with the European Commission.

However, he warned that indications from the Commission had generally been negative. Earlier this year, on a trip to Dublin, the EU Commissioner with responsibility for EU funds, Ms Monika Wulf-Mathies, warned that a full regional government structure would have to be in place before the proposal would even be considered.

Mr Cullen insisted that "the option of a regionalisation approach, whereby the sub-regions of the Border, west and midlands might qualify as a region for full objective one status, is being actively considered by the Government".