The Prime Minister has held talks in Downing Street with Peter Robinson, the DUP Stormont First Minister and the Deputy First Minister, Sinn Fein's Martin McGuinness.

They looked at budgetary issues with David Cameron in advance of his NI visit tomorrow in a top level meeting that also involved the Treasury's Exchequer Secretary David Gauke.

As reported on 4ni.co.uk yesterday, the PM will be at Stormont during his visit to Northern Ireland on Thursday and is due to meet Mr Robinson and Mr McGuinness again - at Stormont Castle this time - and to also address the nearby Assembly.

Today's meeting in London also included the NI Secretary of State Owen Paterson, Enterprise Minister Arlene Foster and Finance Minister Sammy Wilson.

They examined a consultation paper that looked at the implications of devolving corporation tax and how any corresponding Exchequer revenue loss might impact on the block grant. It also presents a number of other tax raising measures.

As well as moves on the Treasury surplus - that was clawed back last year - the indications are now that a package is due for announcement and will be made on Thursday to include the devolution of corporation tax to the NI Executive.

After the meeting, the First Minister said: "There is an urgent need for our economy to produce self sustaining private sector growth which will allow us to rebalance away from dependency on the public sector.

"We need to develop the capacity for the local economy to grow using its own resources and capacity. Our private sector is just too small to achieve and there is a need for a step change in our economic performance," said the DUP Leader.

"Different policies have been tried over the years and despite some successes, this has not transformed the economy in the way we would have liked. There is a need to look elsewhere and we are doing so now.

"These potentially innovative policies relate to fiscal incentives and tax. We will take on board the views of business we received today as we move forward to consider this policy."

In discussing the implications of lowering the corporation tax rate, the Deputy First Minister said: "The possibility of devolving Corporation Tax presents us with opportunity to grow our local economy in the future and the Treasury consultation paper highlights that this could have significant benefits in terms of raising investment both by local companies and from increased foreign direct investment."

Martin McGuinness continued: "While The Executive has been successful in attracting some high level investment, there is undoubtedly much untapped potential. We are committed to creating economic growth for the benefit of all but are currently hampered by the lack of powers to fully realise this potential.

"The ability to vary corporation tax would give the Executive additional leverage, though there is a need to ensure that any change in the rate will deliver jobs and growth without undermining public finances. The views which we received from business today have been useful and will help us in considering the way forward," said the Sinn Fein politician.

Stormont Finance Minister Sammy Wilson said: "The UK as a whole will benefit from this measure. Higher levels of investment, employment and growth in Northern Ireland will mean we make a greater contribution to growing the UK economy. We are not talking about higher growth in Northern Ireland at the expense of the UK. Everybody benefits."

Inward Investment

Many Stormont politicians feel that the region should be able to lower its corporation tax and therefore attract more inward investment from abroad as the current rate in Northern Ireland is 26% compared to 12.5% in the neighbouring Irish Republic.

The Treasury has been undertaking the consultation on giving the Executive the power to lower the corporation tax rate, but under European rules on State aid to regions within nations, any cut in corporation tax would come with a price tag.

The compensating cost to the NI block grant could be £215m per year.

The NI Enterprise Minister has already said she is hopeful that Northern Ireland will win the right to lower its corporation tax, despite concerns from the Treasury.

The DUP's Arlene Foster said a lower corporation tax would create jobs and attract investment and said this would make up for a potential multi-million pound cut in funding from Westminster.

Today in London she said: "The views expressed today by business representatives were encouraging.

"There is a compelling case for the Executive to have the power to adjust corporation tax rates in order to stimulate the economy through job creation and increased productivity. [This] event is an important milestone in the ongoing Treasury consultation process."

See: PM's Visit To Tackle Corporation Tax

(BMcC/KMcA)