Northern Ireland's business leaders have expressed concern they will have to pay the price in the short term for the investment programme announced in Wednesday's budget.

Almost �2bn in additional funds is to be spent on Northern Ireland's roads, schools, hospitals and water service over the next five years.

Direct rule minister Ian Pearson gave details of the budget allocation for the province which will include the extra cash raised from low interest loans from the British Treasury and other sources.

Much of the money will be spent on improvements to Northern Ireland's out-dated infrastructure.

What I am doing today is welcoming those elements of the budget which our ministers championed Roy Beggs Ulster Unionist

The Confederation of British Industry's Northern Ireland director, Nigel Smyth, said the decision to push ahead with investment in infrastructure and public-private partnerships was welcome.

But he said there was disappointment that the business sector was the initial focus for raising the money to pay for the Reinvestment and Reform Initiative.

The Federation of Small Businesses also welcomed the infrastructure spending plans but voiced concern at plans to introduce charging for water.

Policy chairman Wilfred Mitchell said the charges would be a further burden to small businesses who were already struggling with problems such as high insurance.

Political reaction

There has been a broad welcome to the budget from Northern Ireland's politicians, who would have been debating the measures in the assembly but for the suspension of the political institutions on 14 October over allegations of continuing IRA activity.

The Ulster Unionists said they would not be bound by Mr Pearson's budget.

Finance spokesman Roy Beggs said: "Assuming suspension of the institutions is lifted, I envisage some significant changes in the spending priorities of Northern Ireland.

Sean Farren is concerned at water charges

"What I am doing today is welcoming those elements of the budget which our ministers championed, but also setting down a clear marker that we will not be bound by Mr Pearson's spending plans."

Sinn Fein's Francie Molloy, who chaired the Finance and Personnel Committee at Stormont, said the minister had done nothing to deal with the history of underfunding.

"On closer examination of Ian Pearson's claims of delivering �2bn of new additional money, it is clear that he is playing a dangerous numbers game that will affect the future of every man, woman and child living in the north of Ireland".

"It is not so much new money as new taxes on which there has been little debate," he said.

The SDLP's Sean Farren, the former finance minister, accused Mr Pearson of "putting the cart before the horse" in his plans for water charges.

He was "putting the outcome ahead of the process", said Mr Farren who called for full and open consultation on the entire future of the Water Service.

Both of Northern Ireland's universities welcomed the late addition to the budget of an extra �10m for each of the next three years to fund their research projects.

The vice chancellor of the University of Ulster, Professor Gerry McKenna, said it put Northern Ireland on equal terms with funding in other regions of the United Kingdom.