A new Anti-Sectarianism Fund is to be established by the Government to focus on areas in the North where people are most threatened.
Sectarianism is now the prime threat to lasting peace and needs urgent attention at this stage of the peace process, according to Minister for Foreign Affairs Dermot Ahern.
The Minister said he believed a greater emphasis needed to be placed on eradicating sectarianism. "The hard reality is that, as politics has progressed in the North, sectarianism has festered and in many cases grown."
Some €250,000 will be put into the fund initially and will be distributed in sums of €5,000 to €25,000. "I will probably increase the funds as the year goes on depending on uptake and quality," Mr Ahern said.
The fund will be used to take young people away from interface areas at times of tension and to facilitate projects promoting interaction between people, groups and communities who otherwise would not receive funding.
Mr Ahern said he had already begun refocusing the existing Reconciliation Fund on projects to address sectarianism. In 2006 the Government supported an innovative schools link project in Ballymena and other anti-sectarianism projects in Ballymena, Derry and Belfast.
In the latest Reconciliation Fund round, Mr Ahern agreed to support two new projects in divided communities in Castlederg and Larne which have the potential to address sectarianism.
The Reconciliation Fund is for long-term projects, community groups, peace groups and youth centres throughout the island, although mainly in the North.
The separate Anti-Sectarianism Fund, to start in January, can "focus more on the immediate threat from sectarianism", said Mr Ahern.