Northern Ireland's system of rates charges is "unfair and outdated", the finance minister has said.

Sean Farren was speaking at the launch of a public consultation as part of a review of the rates system.

He said a radical rates overhaul could benefit those on lower incomes.

Sean Farren: "Comprehensive review"

Speaking in the assembly on Monday, Mr Farren said: "The system means that a higher proportion is paid by those on low incomes than in a fairer system."

He added: "Any additional revenue will have to be from a reformed and fairer system."

He said domestic water metering and rates on agriculture property had been ruled out by the executive.

The minister said industrial derating was costing Northern Ireland �64m a year.

"The study found that the justification for continuation of industrial derating was questionable and there are strong points in favour of phasing it out over time," he said.

Earlier, this month First Minister David Trimble said there would be no sharp rise in rates over the next two years.

David Trimble: "Review of rating policy"

Mr Trimble was responding to fears that rates will eventually double in the wake of the economic package announced by Chancellor Gordon Brown.

Mr Brown said �200m would be available immediately. This could help speed up developments such as a new regional cancer centre.

However, Mr Trimble said the outcome of a major review of the rating system could lead to some people having to pay more.