The Minister for Finance has urged Irish business leaders to think about what regulatory divergence between the EU and UK might mean in the context of Brexit.

Addressing the Ibec President's dinner in Dublin last night, Paschal Donohoe said the recent letter sent by Boris Johnson to Donald Tusk, outlining his views on the backstop, laid out an option in relation to a different regulatory approach to that of the EU.

Mr Donohoe said if that potential change in the UK economic model happens, which he added it may or may not, then we need to think about what that would mean for Ireland and how it responded to it.

He reiterated that October's Budget would be framed in the context of a possible no-deal Brexit.

The Government is trying to create a framework for the country that will ensure the engine at the heart of the Irish economy remains strong, he added.

The minister also said the business community needed to reflect upon what the relationship between the EU and UK would be as we move through this phase of Brexit.

But he also said that the Brexit challenge would take place in a country that has seen so much change, an economy that has been through so much and with a business community that knows what it is like to change, and at times make difficult decisions.

Mr Donhoe said that as we look at Brexit we should never forget that competitiveness is not just the prerogative of large countries, but it is also important for small countries.

He said it was up to the State to design the policy tool box that will allow it to make that happen.

The minister also urged the audience not to think of Brexit as a project, but rather a process, adding that the work would not end with the current phase as there was more to come.