Warnings about the negative aspects of immigration associated with the £41 billion National Development Plan made by a Inter-Departmental/ Agency Group appear to have been ignored by the Government. The group said last year that the level of immigration required to meet the manpower requirements of the plan may do long-term damage to the economy.

Despite the warnings, the Tanaiste announced last March that the Government planned to bring 200,000 workers into the state in order to make the plan a reality. When the immigrants' dependants are taken into account, more than 336,000 people are expected to immigrate to the Republic over the six-year life of the plan, according to the group's report, which was completed last year and not published.

Although the new workers will help sustain the economic boom in the short term, the group warns that domestic wages and employment could be under threat in the medium term following a period of sustained immigration. The wages of low-skilled workers could be undermined "when the trade cycle turns downwards and demand cools or when the economy suffers an asymmetric shock (for example a downturn in the high-tech sector)", according to the report.

"Those most at risk would be domestic labour market segments, which are already disadvantaged," they warn.

Although the group was alive to the pressing short-term manpower requirements of the economy, it stressed that it should be balanced "against the potential threats of the medium term in shaping economic immigration policy".

Discouraging immigration would have negative short-term consequences as it would contribute to the upward pressure on wages being experienced because of labour shortages.

"Rising wage costs, over time, would diminish the cost competitiveness of Irish output on domestic and foreign markets. In the context of a fixed euro exchange rate, this would lead to diminished output growth, loss of market share and ultimately, job losses and rising unemployment," it acknowledged.

The group also pointed out that the influx of new workers would put additional strain on the State's already creaking infrastructure. The report went on to raise a fundamental question about the wisdom of pursuing continued high economic growth through the National Development Plan. It estimated that three-quarters of the job vacancies arising during the life of the plan would be filled by immigrants which raises "issues relating to the objectives of economic growth". Young skilled immigrants are likely to emigrate if conditions deteriorate in their host country, the group pointed out.