Work on an 8km stretch of the canal near Lough Neagh will begin in the coming days following a decision by government officials in the North that could pave the way for the complete reopening of the waterway.

The now derelict canal was built in 1841 to link the Erne system and the Shannon with Lough Neagh but its success was short-lived. A poor water supply, inappropriately-sized locks and the imminent arrival of quicker rail and road transport sounded its death knell.

However, the Ulster Canal is now viewed as a potential tourism resource following the successful reopening of the Ballinamore and Ballyconnell Canal (renamed the ShannonErne Waterway) in 1994.

The decision to start work on the canal . . . a major step towards facilitating boats travelling inland from Coleraine, Co Derry, all the way to Limerick . . . has come as a result of a successful funding application by the South Lough Neagh Regeneration Association.

In a further development, Eamon O Cuiv, Minister for Community, Rural and Gaeltacht Affairs, and David Handson, the minister of state for the Department of Culture, Arts and Leisure in the North, will have talks on 6 March.

The pair are expected to discuss the reopening of the canal at their meeting about crossborder issues in Belfast.

Brian Cassells, president of the Inland Waterways Association of Ireland, said: "This is the first step in the long-term aim of making the Ulster Canal a reality for the people of the border region.

"The Ulster Canal is the missing link in the inland waterways network on the island and this decision has brought the realisation of all our goals much closer.

"There is a genuine optimism that this decision is effectively the beginning of the project which will lead to a fully-restored waterway."