High-tech US firms based in Shannon have raised serious concerns over the proposal from the Tánaiste, Ms Harney, to transfer the Shannon Free Zone to the new Shannon Airport Authority.

Last week Ms Harney's Department of Enterprise, Trade and Employment confirmed that such a proposal was being actively considered.

It would involve the rental income from the zone being transferred to the Shannon Airport Authority rather than going to Shannon Development.

The estimated €6 million of annual rent would help Shannon to survive on its own, but resistance to the idea is building from businesses and unions. The Shannon Free Zone contains the largest cluster of North American investment in the Republic.

The mid-west branch of the American Chamber of Commerce, which represents many of the firms in the area, is planning to write to Ms Harney within days outlining a range of concerns about this and related issues.

Last night, Mr Peter MacNamara, managing director of Intel Communications Ireland, which is based in the zone, said serious discussions needed to take place on the proposal and Shannon's status generally.

Speaking as a member of the Atlantic Technology Corridor, a group which represents industry along the western seaboard, he said: "Let's sit down and trash this out. We must avoid piecemeal solutions, what we need is an overall plan."

Mr Kieran MacSweeney, managing director of computer hardware firm Avocent, said the region needed a strong airport and a strong regional development authority.

"One should not be at the expense of the other," he said.

Mr MacSweeney is also chairman of the mid-west branch of the American Chamber of Commerce.

He said the idea of transferring the rental income of the zone to the new airport authority would give "a false sense of financial security" to the new airport management.

"While it will provide a short-term cash injection, that cash flow is dependent on successful and additional foreign direct investment coming into the area and that comes from having a strong regional development authority like Shannon Development."

He said the new autonomous Shannon Airport would have its "commercial focus diluted" by benefiting from the rent roll of the zone.

"Management will not end up focusing on other revenue-generating activities," he said.

He added that "piecemeal" policy changes were not the solution.

He said there were broader issues than just the zone and this included the end of the Shannon stopover.

"I think everything should be on the table in future talks. We have to do as much as possible for the western seaboard, because 50,000 people are now employed by 250 US companies in this region.

"We need a strong regional authority to promote the region within the EU, like Shannon Development."

The Shannon Free Zone is home to 120 companies, including Intel, Lufthansa Technik, Halifax, Veritas, Tyco Raychem, SPS, Thompson Financial and DeBeers. The zone has 7,300 employees and firms based there exported goods and services worth €2.5 billion in 2003.

Meanwhile, Clare Fianna Fáil TD Mr Tony Killeen also expressed his concern over the proposal.

"It is being done without any analysis or strategy," he said.