The Republic was the fourth-ranked beneficiary from the European Union's budget in 2001, despite ranking as one of the wealthiest of the 15 states.

Figures published yesterday by the European Commission show that the Republic was one of four countries that received much more out of the EU operating budget than they paid in.

By the Commission's favoured method of measurement, the net balance in the State's favour was €1.2 billion, 1.13 per cent of its GNP. The countries that did even better out of the EU budget were Greece, with 3.5 per cent of GNP, Portugal (1.53 per cent) and Spain (1.24 per cent). Britain was also a net beneficiary by a small amount, 0.05 per cent of GNP, over a one-off change in the way Britain's budget rebate is handled.

Budget Commissioner Ms Michaele Schreyer said the budget showed that the EU was making "major financial transfers" to the four countries receiving Cohesion Funds. She described the result for the Republic as "very positive".

Despite a decreased share of the structural funds, compared to the previous year, the State benefited in 2001 from an increased share of the EU's agriculture spending.

In 1996, the State was a net beneficiary by €2.4 billion, double the 2001 level. A Government official said the sharp reduction in Ireland's benefits was "a reflection of its improved economic performance".