The tensions between the developers of the proposed new National Conference Centre - Spencer Dock International - and the Dublin Docklands Development Authority (DDDA) appear to be lifting after months of sniping.

But the other obstacle which has been facing the centre - tax designation status - does not show any sign of being overcome just yet. Mr Richard Barrett, a director of Treasury Holdings, which forms one part of the consortium, said this week that Spencer Dock was proceeding with the project on the basis of "certain tax designations being in place".

This is despite clear statements by members of the European Commission that on the grounds of the Republic's current economic success, tax breaks for urban regeneration projects may not be acceptable in the future.

Mr Barrett put down a marker that if the European Commission decided to go this route, he would expect the Government to introduce "compensatory tax breaks" - although he has spoken previously about the reluctance of the Government to support the conference centre project.

Against this background the underlying question is what makes the Spencer Dock group so certain the Government would deliver on the tax designation issue?

The nightmare scenario is a refusal by the Government to introduce any new tax schemes for the Docklands area and a move by the Commission to end existing tax breaks. In that event, the original calculations of the developers would need serious revision and the entire project could be under threat again.