The Minister for Foreign Affairs has said that the Government's National Development Plan, due to be published in January, will include a very strong element of cross-border co-operation and connection.

Dermot Ahern was speaking in Dublin after talks with the Northern Secretary, Peter Hain.

Mr Ahern said that during the next decade up to €100 billion of infrastructure investment could take place on the island of Ireland and some of the expenditure will address cross-border issues like roads, rail, electricity and telecommunications. 

Mr Hain told reporters that the British Chancellor, Gordon Brown, will meet representatives of the Northern Ireland parties next Wednesday to discuss a financial package that might be provided for a power-sharing administration at Stormont.

Mr Hain said he wanted to make it clear that there could be no aid package unless there is a restoration of devolved government. 

He also said the Chancellor would not be meeting the parties, unless they are willing to travel as a group and present a common front.

Last week the expected first meeting between the DUP's Ian Paisley and Sinn Féin's Gerry Adams was cancelled because of a row over a ministerial pledge of office supporting the police. 

The parties have still not resolved that dispute but both Mr Ahern and Mr Hain today expressed confidence that a compromise will soon be found.

ESRI calls for cuts in National Development Plan

The Economic and Social Research Institute has said the Government's new National Development Plan will have to be cut back by 16% because the construction sector can not deliver it at a reasonable cost.

The ESRI is recommending that expenditure on social and affordable housing should be cut and that all rail projects - including the proposed new Metro plan for Dublin - should be subject to thorough cost benefit analysis.

The report also says the Government needs to reduce its plans for investment in health, public housing and transport.

One of the report's authors, Prof John FitzGerald, said it was part of the ESRI's job to make suggestions.

Speaking on RTÉ's Morning Ireland, he conceded that some of its recommendations would not be acted on in the immediate future.