Just after news that the Taoiseach, Brian Cowen had welcomed strong interest by potential investors in a new investment initiative, a top business forum has urged a return to economic growth.

The Irish Business and Employers Confederation (Ibec) said cash-strapped consumers remain too afraid to spend and said the focus must be on returning the economy to growth.

The statement came as Mr Cowen commented on the fund, - which could reach a level of €500 million - and is intended to draw high levels of venture capital funding to businesses in Ireland.

The Taoiseach has just announced that 32 expressions of interest had been received by Enterprise Ireland, which is administering the fund.

He said Enterprise Ireland received the expressions of interest in response to its first call, which closed on 26 November.

"These will now be evaluated by Enterprise Ireland, with a view to selecting appropriate investments which will help develop Ireland as a Global Innovation Hub.

Taoiseach Brian Cowen said: "I am delighted that Enterprise Ireland has received such a high level of interest in Innovation Fund Ireland.

"The Fund is a crucial initiative to provide 'smart' capital to innovative Irish businesses to allow them to grow and create jobs.

"Enterprise Ireland and the National Pensions Reserve Fund (NPRF) are fully committed to the successful development of the Fund and the Fund remains a priority for Government," he said.

Meanwhile, Ibec's statement said: "The focus must be on cutting expenditure rather than raising taxes and ensuring that, when revenue is raised, it is done in a way that is least damaging to growth."

"The country would not recover from the crisis unless the economy begins to grow."

Ibec said the budget must also ensure the cost of business is reduced and that potential cutbacks in agency and departmental budgets do not see higher costs passed on to companies.

(BMcC/GK)