The protection of national industrial champions at the price of a competitive economy will ultimately be harmful for the Republic, Goldman Sachs chairman Mr Peter Sutherland, said yesterday.

Speaking before an address to a Competition Authority conference in Dublin, Mr Sutherland, a former EU Competition Commissioner, cautioned against the protection of inefficient markets and said that a coherent competition policy was key to innovation in any economy.

"Overall, it seems to me that the former idea of protecting national champions, which was probably a legitimate part of an industrial strategy in earlier days, ultimately is undesirable today.

"What people need to keep the Irish economy competitive is the highest degree of efficiency and, therefore, the protection of national champions is something that doesn't work."

There was no point, said Mr Sutherland, in denying "competition to maintain the viability of an unviable entity".

He said true liberalisation in sectors such as energy, telecoms and pharmacy was required.

"Competition is very, very important. It's particularly important where you have a history of significant power in formerly state monopolies," he said.

Earlier, the Tβnaiste, Ms Harney, told conference delegates that a Bill designed to extend the powers of the Competition Authority was to be published before Christmas. The legislation, which Ms Harney expects to be enacted before Easter next year, will increase the severity of penalties in the competition area. The maximum jail term applicable to competition infringements will increase from two to five years, and fines will also rise.

"I hope that we can get to a situation where there is widespread support among consumers at large for what we're trying to do," said Ms Harney.