Several local and regional authorities will submit bids next month for at least €20 million (£15.74 million) in Government funding to build telecoms infrastructure in the regions.

Local councils in Donegal, Mayo, Roscommon and Galway are developing telecoms projects and are expected to submit bids by the deadline of October 19th.

The Government is offering 90 per cent funding under the National Development Plan (NDP), with the remaining 10 per cent to be supplied by public bodies. The new scheme represents the first fully publicly funded telecoms project since the privatisation of Eircom in 1999.

However, a spokesman for the Minister for Public Enterprise, Ms O'Rourke, told The Irish Times yesterday the scheme did not represent a reversal of Government policy on privatisation.

"What's happening here is the adaptation of the E-Commerce Infrastructure Measure of the NDP to reflect global and local market realities."

The Government measures also include a call for proposals from private companies that want to build telecoms infrastructure. Just 40 per cent funding is available to these organisations.

However, interest from the private sector is expected to be limited as several firms, including Eircom, pulled out of a previous call for investment in telecoms earlier this year.

The new strategy involving public bodies was developed by the Department of Public Enterprise this year in response to difficulties in the sector.

"Those realities are a downturn in the technology sector globally and a scarcity of private capital for investment, in particular in public policy-driven and social projects.

"If we are serious in our regionalisation policies, we have got to adapt and adjust our programmes to ensure that we achieve infrastructural investment which facilitates the achievement of those policies," said the spokesman.

At least two county councils - Donegal and Mayo - will submit projects for funding. They will probably submit applications as part of regional consortiums.

Mr John Condon, Mayo county secretary, confirmed the county had appointed consultants to prepare a bid for what could be a €15 million project. "We're going for broke on this," he said.

"We expect there will be a fibre cable attached to the gas pipeline planned for Mayo and we would want to link all major towns to that."

Mayo is working in conjunction with local councils in the counties of Roscommon and Galway on the bid, which may be submitted by the Western Regional Authority, he added.

Donegal County Council has contacted Sligo and Leitrim councils over its telecoms plans, which may include connecting with Northern Ireland, according to Mr Fergal Reidy, community and enterprise development officer at Donegal County Council.

Donegal's project will link local towns to the proposed fibre network being built by the ESB between Sligo and Donegal.

Initial estimates show the project may cost up to €5 million.