A group of prominent Irish business and political figures has failed in its bid to win the contract to run the European internet domain name registry, writes Jamie Smyth.

Instead, a rival bid from a Belgian consortium was ranked first in a comparative selection process in a draft decision made by the European Commission. The decision notice shows the Irish bid, which was branded Eureto, did not make the final short-list of three drawn up by the European Commission.

The European domain registry will manage the distribution of the new internet domain name .eu. It is expected that the registry - which will now be based in Brussels - will begin offering .eu domains before the end of 2003.

The Eureto bid proposed establishing the registry in Derry, Letterkenny and Dublin. It also claimed to have the full support of the British and Irish governments, including IDA Ireland, Enterprise Ireland and Invest Northern Ireland.

Eureto's board is chaired by former Fianna Fáil fund-raiser Mr Paul Kavanagh. It also includes former ministers for foreign affairs, Mr Dick Spring and Mr David Andrews, and former ambassador Mr Seán Donlon.

Several senior European businessmen were also part of the consortium, including the chief executive of Slovenia software firm Hermes, Mr Rudi Bric.

Mr Kavanagh would not comment on the draft EU decision yesterday when contacted. But it is understood the bid team is disappointed by the draft decision.

The decision will also disappoint the Government, which provided strategic support to the consortium. It had hoped a winning Eureto bid would bring kudos to the Irish high-tech sector.

An official announcement by the Commission is expected within the next few months. But a spokesman for the commissioner with responsibility for telecoms and internet, Mr Erkki Liikanen, said yesterday he could not confirm the Belgium bid had won. He said the decision-making process was still ongoing.

It is understood the Commission cannot formally announce the results of a competition before member-states are consulted on the draft decision. But it is unlikely that any state, including the Republic, will be able to amend the draft decision.

The winning bid was set up by the director of the Belgian country-code domain, Mr Marc Van Wesemael. It also had senior Belgian business interests on its board, according to the e-zine www.theregister.co.uk.

The Belgian bid originally proposed selling the .eu domains at €10 each, with the intention that this will fall to €5 after a year.