When the chairman of the International Fund for Ireland visited the Shankill Road earlier this year to announce funding for a new youth centre in the heart of loyalist Belfast, he had the look of a satisfied man.

Local community workers gave Mr Willie McCarter a warm welcome and assured him that the days when the Protestant community saw the fund as "blood money" for the despised Anglo-Irish Agreement were forgotten.

Since being set up in 1986 following a commitment by the British and Irish governments in the Anglo-Irish Agreement to help areas hardest hit by the troubles, and to seek international support for this work, the IFI has come in for its share of criticism.

It has also been praised by President Clinton, Mr Jacques Santer and the British and Irish governments, who appoint members to its independent board.

Linked to the Anglo-Irish Agreement, it was dogged initially by a severe image problem among unionists. This has not, however, prevented some unionist politicians from availing of funding.

One consistent critic has been Ulster Unionist MEP Mr Jim Nicholson. In September, he called for the resignation of the chairman and chief executive of the fund, alleging a lack of transparency in its operation, discrimination against Protestants and a failure to create sustainable jobs.

A veteran Shankill Road community worker, Mr Jackie Redpath, does not agree and says the IFI has made "serious efforts to make up the ground lost" in its early years. Backing Mr McCarter's chairmanship, he says that no funding body has managed to allocate equally to the Catholic and Protestant communities.

Mr Redpath says it's no longer good enough for any funding body to wring its hands and say it didn't get applications from Protestants. "They need to go into a development mode and foster projects, and there is evidence of the IFI doing that. There are significant IFI programmes in the Shankill area."

The IFI has never carried out what Mr McCarter calls a sectarian headcount to see which community has benefited most. He stresses that the fund is only interested in meeting its twin aims of promoting economic and social regeneration, and encouraging dialogue and reconciliation between the two communities on the island.

The fund decides priority areas and has specific programmes to match these. The six Northern counties receive 75 per cent of the funding and the six Border counties in the Republic get the remaining 25 per cent. Up to the end of last year, £330 million sterling was allocated to some 3,400 projects.

The EU, which started contributing in 1989, is now the biggest donor, providing approximately half of the budget. The US is next, while Canada, New Zealand and Australia give smaller amounts.

In 1995, Mr Nicholson produced a report on the fund which he said proved its job-creation claims were exaggerated. A more comprehensive report by independent consultants KPMG, published in May 1995, painted a very different picture.

It found that 16,645 jobs had been created on IFI-supported projects up to the end of 1994. A further 7,142 indirect and construction jobs were created. It was also highly positive about the fund's contribution to promoting reconciliation.

A further report by the British-Irish Inter-Parliamentary Body in 1996 was also generally positive but was more conservative about the fund's record on job-creation.

It quotes statistics from the Northern Ireland Economic Research Council (NIERC), saying that the net figure for jobs created by the IFI alone stood at 7,000 at the end of 1994. This took into account the involvement of other agencies in the creation of the 24,000 jobs cited in the KPMG report, and jobs which would have been created even without IFI involvement. It concluded, however, that the fund's performance in job-creation was very satisfactory.

The British and Irish parliamentarians who compiled the report also concluded that the fund was "doing all that can reasonably be expected to reach out to unionist areas of deprivation".

Mr McCarter says the IFI has evolved and recent programmes would seem to be in response to past criticisms. More than 70 per cent of the fund is targeted at disadvantaged areas and most of the wards classified as disadvantaged have Catholic majorities. A new system allocates funds to "subward pockets" in otherwise affluent areas, thus reaching more Protestant communities.

Flagship projects such as the Shannon-Erne waterway and the facelifts given to many town centres are the most obvious results of IFI expenditure. Mr McCarter is also keen to point to "pioneering programmes" aimed at developing business links between Irish and US companies, and training schemes abroad for young unemployed people from the two communities in the North and disadvantaged areas in the South.