The Irish Small and Medium Enterprises Association (ISME) has accused Bord Failte of threatening the livelihood of people in the private sector by asking companies to manufacture merchandise under licence.

The tourist board is proposing to issue licences for items such as postcards, calendars and posters. It would collect a royalty for use of the TBI (Tourism Brand Ireland) label which would represent a product of fixed standards.

Mr Frank Mulcahy of ISME, said the state-sponsored body was acting outside its remit in using taxpayers' money "against the private sector". Bord Failte had a role to co-ordinate and encourage companies, but not to pit them against each other, Mr Mulcahy said

"What the tourist board is doing would limit rather than maximise the diversity that is there," he said.

A Bord Failte letter issued to printing companies states: "Licensees will be appointed in the various sectors by way of licensee agreement prepared by Bord Failte which would contain conditions as to the use of the TBI logo.".

A spokeswoman said the company would not be commenting on the issue because it was interlinked with the Minister for Tourism, Dr McDaid's, opposition to use of the new Bord Failte logo which replaces the old shamrock design.

"Bord Failte has to report back to the Minister and, in the meantime, there will be nothing further said," she said.

According to its letter, Bord Failte also proposes using the TBI label for playing cards, coasters and embossed clothing such as T-shirts and sweatshirts. Mr Mulcahy said companies which had invested heavily in product development would feel threatened by a set of criteria set by the tourist board.

He added that in view of the controversy surrounding its choice of a new company logo, he was questioning Bord Failte's capacity to decide what was good and what was bad.