The Government must avoid taking a "stop-go" approach to funding research, and address an €80 million funding gap caused by its decision to "pause" investment in capital projects last year.

It should also introduce a 20 per cent tax credit for research in the 2004 Budget to ensure the Republic does not lose projects to competitors within Europe, a division of Forfás said yesterday.

In a statement on expenditure, the Irish Council for Science and Technology Innovation said the Government's prior commitment to the Higher Education Authority's programme for research in third-level institutions should be reinstated in 2004.

Maintaining support for research, especially in difficult economic times, was vital to retaining and creating jobs, it said.

Budget cuts in the authority's capital programme ordered by the Government last year had resulted in an €80 million shortfall, said Dr Edward Walsh, council chairman.

This was delaying a number of key projects across the State, he said.

Dr Walsh said there was a need for certainty in public funding if the State was to succeed in becoming a centre for world-class research. The authority's programme for research in third-level institutions should be reinstated.

Meanwhile, the council recommended the introduction of a 20 per cent R&D tax credit to ensure the Republic can compete for projects. The body warned key competitors such as Britain, France and Spain already offered a similar tax credit.