The national conference centre planned for Spencer Dock could not be built and run without the promised rent and rates reliefs and the Government would now have to find a new form of subvention if the project was to continue, the developers said last night.

Other companies that will suffer as a result of the decision by the EU commission expressed their disappointment, but said they would press on with their plans to operate from the next phase of the docklands development.

The chief executive of the Dublin Docklands Development Authority, Mr Peter Coyne, said the removal of the relief was disappointing, but added that the move had been seen in recent months as inevitable.

"It has been inevitable now for some time now that the prospect of extensive use of double rents and rates into the future simply was not there," he added. "This is because of the change in status of Ireland - the loss of Objective 1 in this area - and the general economic performance. But those factors mean that the docklands project has viability through the market."

But a spokesman for Treasury Holdings, the main developer of the proposed national conference centre, said the decision left this project facing a significant financial problem.

The centre would cost £125 million (€158.7 million), he added, and even then would run an annual loss of around £6 million. There would be a capital grant of just £26 million, leaving a total cost of £99 million he added.

"If the double rent goes, it makes the financing of the conference centre a lot more difficult. If you don't have that, it will not be possible to finance it without the Government putting in some other sort of subvention. We are hopeful that will happen," the spokesman said.

He said the Government should subsidise the centre because, while the business itself would not make a profit, it would generate large amounts of revenue for the economy.

Other companies likely to suffer as a result of the decision expressed little surprise. Bank of Ireland said the company was not planning to take legal action against anyone over the matter.

The US insurance group AIG said the EU move would "have little impact" on the company's plans to operate from the site.

The solicitors A&L Goodbody, also moving into the docklands area, would offer no comment on the issue.