Sinn Féin's "Long Kesh school of economics" is a major threat to the future economic stability of the State, a leading businessman warned yesterday.

Former Anglo Irish Bank executive director Tiarnan O'Mahony said Sinn Féin would bring "old-fashioned Marxism" to Ireland.

Addressing the March luncheon of the Leinster Society of Chartered Accountants, Mr O'Mahony described Sinn Féin's policies as economic terrorism which would nationalise industry and increase taxes, particularly corporation tax.

Mr O'Mahony, who now heads the banking venture, International Securities Trading Corporation (ISTC), said the prospect of a strong vote for Sinn Féin in the forthcoming general election was one of two possible threats facing the State.

He also criticised what he described as reports which suggested that the Republic, through its low corporation tax regime, was colluding with US corporations to evade paying tax in the US. "It is not our tax rate that is wrong," he said. "It is the US tax rate that is wrong and they can adjust that in the morning if they want to."

The US Internal Revenue Service, the government agency responsible for tax collection and law enforcement, did not need us to do their jobs for them, he said.

Mr O'Mahony said there was a "creeping paralysis" that was leading some people to conclude that it was wrong to have a low tax regime, and he criticised attempts by some EU states to harmonise tax rates.

"We are entitled to our own taxation rates, and if Germany and France want to harmonise taxes, they should bring their rates down to 12.5 per cent," he said.

"If you did have a corporation tax at 35 per cent, as Germany and Sinn Féin would advocate, there would be an exit of companies."

His own firm, ISTC, which raises debt finance on the capital markets and lends the money to banks and insurers as tier one and tier two capital, would have to consider its position if corporation tax in the Republic was raised to the levels of some other EU members, he said.

Mr O'Mahony, who is also chairman of the Pensions Board, warned trustees of pension funds to get their houses in order before new legislation is enacted in April and comes into force in the summer. This will see a new system of enforcement and fines being introduced.

"We are going to enforce that fines system very rigorously," he said. "Any breach will be hammered with a fine."