Politicians in the North have voiced their concern at reports that the British Deputy Prime Minister, Mr John Prescott, is considering changing the method by which public funds are allocated to the regions.
The so-called Barnett formula, named after the then Treasury minister Lord Joel Barnett, was introduced in 1978 to cater for the special circumstances of the UK's more deprived regions. English politicians have felt that since then, Northern Ireland, Scotland and Wales have benefited disproportionally from it, to the detriment of less well-off English regions.
In an interview in yesterday's Guardian, Mr Prescott predicted that there would be "one hell of a debate" when the issue was thrown open once Labour succeeded in securing a second term. Reacting to Mr Prescott's comments, a member of the Assembly's finance committee, the DUP's Mr Nigel Dodds, warned of a "major battle to retain Northern Ireland's present share of the Exchequer block grant.
"Clearly there is big pressure on Labour to deliver more to the English regions and as a result, the focus could be on ways to cut spending on the regions like Scotland, Wales and Northern Ireland. The battle to prevent cuts to our block grant must be fought vigorously and with as much force as can be mustered."
While it was true that expenditure per head of population in the North was some 39 per cent higher than in some English regions, this was not comparing like with like, Mr Dodds said.
The chairman of the Finance Committee, Mr Francie Molloy of Sinn Fein, described Mr Prescott's comments as "the first shots in the funding war". While welcoming the possible abolishment of the Barnett formula, which his party had always seen as unfair, it was unacceptable for the British exchequer to cut back on its responsibilities in supporting the peace process, Mr Molloy added.
Following a meeting with the Welsh Finance Minister, Ms Edwina Hart, Northern Finance Minister Mr Mark Durkan said he was not afraid of a review of Barnett, which was "long overdue" and needed to be replaced with a more needs-based formula.
A spokesman for Mr Prescott last night denied that there were concrete plans to review the formula.