The Government has confirmed it is seriously considering giving the Stormont Executive powers to lower corporation tax in Northern Ireland.

Secretary of State Owen Paterson said the "possibility" was one of a whole range of measures being examined to help revive the private sector.

But he gave no date for when the handover of the powers to the Executive might take place and also failed to flesh out the new Conservative administration's proposals for an 'enterprise zone' for the province.

In an interview with the Church of Ireland Gazette, Mr Paterson also said the Government wants to help get credit for small firms.

"But I think Northern Ireland has a much bigger long-term problem. It's a monument to the failure of British regional policy over the last 40 years," said Mr Paterson.

"Northern Ireland has the lowest productivity in the UK, and the total over-dependence on public spending is unsustainable."

The Northern Ireland Office head said that, according to one study, public spending in Northern Ireland represents 77.6 % of GDP which was "wholly and totally unsustainable".

"And what I have said consistently for three years is it's irresponsible to do nothing. It's equally irresponsible to move too fast and too precipitately.

"We've said we would like to bring in a whole raft of radical measures to turn Northern Ireland into an enterprise zone and over a period - which I've suggested could take as long as 25 years - rebalance Northern Ireland's economy.

"We're looking at a whole range of measures which could help revive the private sector and one of those definitely is the possibility of giving the power to lower corporation tax to the Executive here."

According to the Gazette report, Mr Patterson said an enterprise zone "meant an environment in which people wanted to expand existing local businesses or bring in fresh businesses, with finance being made available".

Business advisors PriceWaterhouseCoopers chief economist Esmond Birnie has said the proposals offer a "once-in-a- lifetime" opportunity for the Executive to negotiate for devolution of tax-raising and tax-varying powers.