Business leaders and economic analysts in Northern Ireland have welcomed the IRA ceasefire but cautioned that it would have little economic affect in the short term.

They believe that tourism and investment will benefit if the ceasefire holds, but that the gains will take time to emerge.

Managing partner at Coopers and Lybrand, Mr Stephen Kingon, said the ceasefire might not be enough to persuade local businesses to invest because "it faces something of a credibility gap as to its long-term stability". He said it could be up to two years before the economy picked up as a result of new indigenous and inward investments.

"Those who held back in investment before the ceasefire are unlikely to be persuaded to invest until they are convinced that the peace is real," he said.

Mr Alan McClure, of the Northern Ireland Institute of Directors, said the business community would treat the renewal of the ceasefire with "understandable caution". He said the next 10 months could be the most significant in the history of the North.

According to an IOD statement: "The business community has already greeted one ceasefire with increased investment in the province's economy, given subsequent events they will treat this renewal of the last ceasefire with understandable caution."

The Confederation of British Industry, whose chairman Mr Bill Tosh has been a leading business figure in calling for a ceasefire and political progress, strongly welcomed the ceasefire. The CBI said that the business community would now be looking for political progress to be made.

Dr Graham Gudgin, director the Northern Ireland Economic Research

Centre, said that if the ceasefire held, the main affect would be on tourism. Over five years, between 10,000 and 20,000 jobs could be created directly from that industry alone, he said. Most of the expected visitors would come from the Republic.

"The ceasefire will have an impact on inward investment but on a much smaller scale than people would imagine," said Dr Gudgin. The number of companies investing in the North did not increase during the last ceasefire, but the quality of investment improved, with more hitech electronic companies investing more, he said. The big question concerning the impact of long term peace on the Northern economy relates to public expenditure, and whether money currently spent on security will be redirected to other sectors in the North.

Dr Gudgin said he feared the Labour government would want to spend this money on projects throughout the UK. "The government could save

£500 million by running down security in Northern Ireland.

That is tempting for the Labour government which is very tight on public expenditure, and has promised not to increase taxes," he said.

It is estimated that up to 10,000 jobs could be shed in the police and prison services. This could offset any gains made in tourism, if the money is not put back into the Northern economy.

Mr Douglas Hamilton, a senior economist with the Northern Ireland

Economic Council, said that if the ceasefire held, it would have a significant affect on North/South links.

"Political stability will lead to greater cross-Border co-operation, which has already been underway for a number of years, but intensified during the last ceasefire," he said. Greater policy co-ordination would be important in the future, he said.

There was no immediate comment from the Industrial Development

Board, the body charged with attracting foreign investment, especially in the hi-tech and computer sectors.

The IDB says foreign investment has reached record levels and that the economy has outperformed Britain in many areas.