US companies did not come to Ireland for its small market of four million people, said Ms Harney. They came to exploit the advantages the Republic provided for a wider European market.

The Tánaiste, Ms Mary Harney, warned yesterday that US companies would look elsewhere other than the Republic for investment opportunities if Ireland rejected the Nice Treaty.

"I think over time companies will hollow out and when they are looking at new opportunities they will look elsewhere because effectively Ireland is a launching pad for Europe," said Ms Harney, speaking on the fringe of the US-Ireland Business Summit in Washington yesterday.

"I think it won't have an overnight effect in the sense that nobody will get up and go, but if they get a sense that Ireland is not in the heart of Europe, that sense of disengagement will reinforce itself in the minds of investors and our competitors will use it against us."

A number of US business executives at the two-day summit in Washington also expressed concern about the possible loss of influence of Ireland in Europe if the electorate gave a no vote in the referendum, expected later in the autumn.

US Secretary of Commerce, Mr Don Evans, in an address to the summit, said American firms were drawn to Ireland and to Northern Ireland partly by access to the single European market. "They create new markets for US products and services in the Republic and across Europe," he said. Almost 600 US companies have invested in the Republic and over 100 in Northern Ireland.

Future decisions to invest in Ireland would be affected if Ireland created the impression "that we are sort of detached from the European Union, that we are not at the heart of it and we haven't got influence", the Tánaiste said.

"It has been influence, for example through Nice, that allowed us to keep our corporate tax rate, to keep autonomy over deciding corporate tax levels. If we had no influence, we wouldn't be able to get that outcome in the Nice Treaty."

Many US firms operating in Europe often tried to influence legislative EU decisions and made use of friendly nations in Europe to help them shape policies. "If Ireland is not at the heart of Europe and is marginalised, it won't have any influence. American companies will begin to feel that."

In addition to a rethink by corporate America, Ms Harney warned of the effect of a second no vote in Europe where the rejection of the Nice Treaty in the first referendum had created a negative image of Ireland. "I think that if we reject Nice, Irish companies that are seeking to capture business opportunities in central and eastern Europe are going to find it increasingly difficult," she said.

"Many of them have said to me, on recent visits there, that they got quite a hostile reception to the rejection on the last occasion. People feel we are trying to keep others away from the opportunities we got, and that will reflect itself in the attitude to Irish companies seeking to trade into central and eastern Europe, which has been a very important part of our focus for the last couple of years.

"It will be a double blow if we reject Nice on the next occasion. It's not without economic consequences, there's no doubt about that. It's an important vote. It's not a trivial thing. The consequences are not insignificant, they are very significant.

"If the Germans had rejected us in 1973, I think we would feel very sore about it and it would have left a lasting impact on relations between Ireland and Germany so I think we need to understand it in that context."