Two counties and parts of three others have been given special tax designation despite fears that the national heritage could be damaged as a result.
Warnings from the Heritage Council about the environmental consequences of introducing tax incentives for development in the upper Shannon region were not accepted by the Minister for Finance, Mr McCreevy.
Under the Rural Renewal Scheme, all of Leitrim and Longford, together with large parts of Roscommon, Sligo and Cavan, are designated for lucrative tax incentives to encourage commercial, industrial and residential development to reverse population decline.
According to documents released under the Freedom of Information Act, the Heritage Council - a State body which advises the Government on heritage matters - warned the Minister in January 1999 that the scheme "could harm the national heritage" in these counties.
The council expressed "serious concern" that no Government department or agency had been charged with overseeing how the scheme was implemented. It said there was "a clear need for a cohesive strategic plan for the development of the designated area as a whole".
In its submission, the council said that given the experience of the Seaside Resorts Scheme, which had resulted in "a number of inappropriate developments in sensitive coastal areas", a plan should be drawn up by a task force under the aegis of the Minister for the Environment, Mr Dempsey.
Nine months earlier, in April 1998, Mr Dempsey wrote to the Minister for Finance suggesting that the Department of Environment was "in the best position to assume responsibility for ensuring the effective implementation and monitoring of the Rural Renewal Scheme".
However, Mr McCreevy rejected the idea of transferring responsibility to the Department of the Environment. He told Mr Dempsey by letter in June 1998 that the upper Shannon designation was "a pilot scheme and I would like to oversee it myself so as to ascertain how it is progressing".
Last July, Mr Paddy Matthews, the Heritage Council's planning officer, complained that "the lack of an overall strategic plan for the pilot area" had still not been addressed. He said this "laissez-faire approach" was "clearly not in line with the principles of sustainable development".
He accused the Department of Finance of being "solely concerned with the enhancement of economic growth" and of "failing to grasp the essential characteristics of good planning for sustainable development".
As a result, he said, "strategic planning has been given no place in the scheme".
According to Mr Matthews, the upper Shannon was "particularly susceptible" to irreversible damage to its heritage and environment due to inappropriate development. It could not be protected solely by the local authorities' development plans.
In the light of what happened with the tax incentive scheme for seaside resorts, Mr Matthews told the two ministers: "We can no longer afford to embark upon a scheme which offers lucrative financial incentives for property developers without first putting a strategic plan in place." Though Mr McCreevy was "aware of the Heritage Council's concerns" about the upper Shannon scheme, his private secretary wrote in September that environmental guidelines were "not a matter for the functional area of responsibility for this Department".
It is also clear from the documentation that the EU Commission's decision to approve the scheme in July 1999 was made without any reference to its environmental consequences; it came from the office of the Competition Commissioner, Mr Karel van Miert.
Six months earlier, referring to fears that the Commission would disallow further tax incentives because of Ireland's prosperity, Senator Donie Cassidy (Fianna Fail) told Mr McCreevy that he would be "happy to personally shoot the Celtic Tiger" if it appeared during the negotiations.
The Minister for Arts and Heritage, Ms de Valera, rowed in behind the Heritage Council, expressing "strong support" for its proposals in a letter to Mr Dempsey in September.
However, even after two meetings with Department of Finance officials, the council was making no progress.
Mr Michael Starrett, the council's chief executive, told Mr Dempsey in November that the "wholly insufficient" upper Shannon scheme did not even require plans to be prepared for the towns covered by it. This posed "a threat to the integrity" of their historic fabric.
Yet although the Department of the Environment agreed with the "broad thrust" of the council's criticisms - even if some of its specific recommendations were "somewhat over the top" - another six months would pass before a round-table meeting was arranged.
A memo in January by Mr Finian Matthews, principal officer in the Department's planning division, noted that the council had accepted that, with the Rural Renewal Scheme "now well up and running, it is too late at this stage to put many of these suggestions in place".
Even the idea of convening a meeting of all the parties drew a hand-written warning from the Department's then assistant secretary, Mr John O'Connor: "We need to be conscious of the resource implications of being drawn into this, bearing in mind other priorities," he wrote.
The meeting, proposed by the Heritage Council, finally took place on April 28th in Rooskey, Co Roscommon, attended by representatives of the Departments of Finance and Environment and the five local authorities - with the latter insisting they could cope with the demands of the scheme.
Mr Dom Hegarty, the senior Environment official who chaired it, was concerned about sporadic rural housing. "Buildings are not like plants; they can't be shifted around when they're built. Local communities are going to have to live with any mistakes for a long time," he wrote. The five county managers from Leitrim, Longford, Roscommon, Sligo and Cavan made it clear they were conscious of the need to avoid repeating "the problems that may have arisen" with the Seaside Resorts Scheme. It was agreed to meet again at six-month intervals.
However, their sanguine view of the prospects is not shared by Friends of the Irish Environment. Predicting that the scheme would almost certainly lead to disaster, Dr Sara Dillon, one of FIE's founders, wrote last July that no European state was as careless with its landscape as Ireland.