Pharmacies will not face a return of strict regulation on ownership following the completion of a high-level review.

The Pharmacy Review Group said there should be no regulation apart from a limit of 8 per cent on the number of General Medical Scheme (GMS) contracts held by one group in any health board area.

It also said the current derogation, under which foreign-trained pharmacists are not allowed own pharmacies in the State, should be lifted - but only when a new Pharmacy Act is enacted.

A spokeswoman for the Minister for Health, Mr Martin, confirmed that Mr Martin had received the report on January 31st but said he would not be commenting on it until it was published next week.

It is expected, however, that the review group's recommendations will be implemented in full.

The review, chaired by Dr Michael Mortell of UCC, was established following an OECD report in 2001 criticising restrictions on ownership in the sector.

Last year, the Government abruptly removed all restrictions on the advice of the Attorney General that they were ultra vires following inquiries into their status during legal proceedings.

The Competition Authority last night broadly welcomed the report but said it had not gone far enough in certain areas.

The Irish Pharmaceutical Union (IPU), which has found itself increasingly isolated in the review group, warned that the findings could lead to the closure of many local pharmacies.

IPU president Mr Richard Collis said that, while pharmacists welcomed many of the recommendations in the report, including the ending of the derogation, allowing companies or individuals to acquire up to 8 per cent of the GMS contracts in health board areas was a disaster.

"The main beneficiaries of this proposal will include international companies who are prevented from buying retail pharmacies in most of the major European markets because of regulations in those countries, but who will now be able to enter this market and acquire well over 100 pharmacies each across the country," he said.

The IPU had been pressing the European model, which broadly limits ownership of pharmacy outlets to qualified pharmacists.

A spokesman for the Competition Authority, however, said the inclusion of any limit on GMS contracts was a mistake. "We have consistently said there is no public policy reason to restrict the ownership of pharmacies," he said. "There is no need for a limit."

This view was supported during the review by the Department of Enterprise, Trade and Employment and by the Consumers' Association of Ireland.

The spokesman also said the temporary continuation of restrictions on foreign-trained pharmacists was unnecessary. "The lifting of this derogation will depend on the passing of new legislation and that is unlikely to happen for 18 months. There is no reason not to end the derogation now."

Mr Collis noted that the review group had warned there was "insufficient evidence" to suggest that its recommendations would "improve or disimprove the quality of service, reduce prices or affect patient safety".

He added that the review had accepted that an ongoing open market was likely to see the reduction or disappearance of some types of pharmacy service, in particular single-owner operated local outlets.

The Competition Authority said its view was that competition should reduce prices over time but added that price was not the only issue. "There is also the question of accessibility."

The spokesman added that there remained valid reason to regulate pharmacies regarding public health issues to protect patients.