A £15 million shopping development announced on the day the IRA ceasefire broke down has run into problems. The developer has failed to sign up a major supermarket for the site, and there are fears that UK chainstores may be reluctant to commit themselves because of the unsettled political situation.

The development was intended to transform an area of Lurgan town centre which had been severely damaged by IRA bombs. Planning approval was announced on February 9th, the day of the IRA Docklands bombing in London.

The resumption of IRA violence has had a significant effect on the Northern Ireland tourism industry, and on business confidence. There are also fears that attempts to attract further inward investment was further undermined by the recent street disturbances, including last month's confrontation at Drumcree, near Portadown, involving the RUC and Orange Order.

It was during the Drumcree stand off that Kimberley Securities, the company behind the Lurgan shopping centre development, announced it had decided to defer the purchase of a key property. It denies that it has pulled out of the scheme, and says that it is simply waiting until it can sign a major supermarket chain as its anchor tenant.

The leader of the Ulster Unionist group on Craigavon Borough Council, Mr Fred Close, rejected the suggestion that the violence surrounding the confrontation at Drumcree had deterred inward investors. He said that Lurgan and Craigavon had been very successful in attracting new business, and that the Orange Order demonstrations had done nothing to dissuade investors from coming into the area.

Meanwhile, the Northern Ireland Tourist Board (NITB) has said that only one potential hotel development project has been lost as a result of last month's violence. The NITB said the project had been proposed by a small local group, which has since indicated it is no longer proceeding with it.

The board said that in spite of the gloom provoked by the Drumcree stand off, its development division was currently handling around 50 "live" hotel projects. Of these 12 are understood to be new developments such as the £9 million Jury's Hotel and the £21 million Belfast Hilton.