The Irish Independent reports that an Irish  businessman accused of masterminding Britain's biggest VAT fraud, has retained his multi millionaire status despite reaching a €26.5m settlement with British and Irish authorities.

The Irish Independent also reports that an eleventh hour refinancing has been agreed for troubled telcoms firm Smart Telecom.

The Irish Times reports that Smart Telecom appeared last night to have come back from the brink of liquidation after a consortium led by businessman Brendan Murtagh, its biggest single shareholder, came forward with a proposal to refinance the troubled company.

Neither the value nor the terms of the refinancing package are known but a restructuring is likely to see Mr Murtagh and his colleagues make a proposal to take a rump of the company private, delisting it from the Alternative Investment Market (AIM) after two years in public ownership.

The implications of the development for Smart's senior management and its remaining staff are unclear because Mr Murtagh's consortium is considered likely to focus heavily on its broadband business, which has about 15,000 subscribers.

The fixed-line service that Smart delivered to 45,000 personal and corporate customers was cut off without warning on Monday after Eircom disconnected the service in a dispute over billing.

Talks chaired by telecoms regulator ComReg throughout yesterday resulted in a commitment from Eircom to begin restoring a partial outgoing call service today. Customers will be free to choose an alternative supplier.

ComReg, which insists it has no role in debt disputes, did not intervene in the case until the Minister for Communications, Noel Dempsey, asked it on Monday night to oversee talks, which began early yesterday.

Given Smart's failure to secure the continuity of the fixed-line service in the face of a disconnection notice from Eircom, which was extended three times, the company is unlikely in a new scenario to concentrate on a business in which public confidence has been severely undermined.

In a notice to the AIM early yesterday, Smart asked that its shares be suspended pending clarification of its financial position.

The next update from the company, which may came later today, is likely to confirm its receipt of a proposal from Mr Murtagh's consortium. This will have to be approved by the company's other shareholders, who include former Allied Irish Banks chairman Lochlann Quinn.

It was not known last night whether Mr Quinn has involved himself in Mr Murtagh's consortium. The identities of the other members of the consortium and their financial backers was also unknown. Given the continuing threat to the company's viability, a proposal that avoids liquidation might well be endorsed by shareholders.

Smart's difficulties spilled into the open last month when its founding chief executive Oisín Fanning resigned on health grounds.

As Smart made most of its staff redundant, it emerged that Mr Murtagh, who owns 20 per cent of the company, was keeping it afloat as it burned €2.5-€3 milllion per month in running costs.

In recent weeks, Smart has been run by its former chief operating officer Ciarán Casey, who replaced Mr Fanning as acting chief executive, and by its finance director, Brian Timmons.

The Irish Times also reports that Ireland's prosperity is under threat because of the declining value of our exports, according to the chairman of the Small Firms Association (SFA).

The economic boom has been fuelled by domestic demand because easy credit has over-stimulated personal consumption, Pat Crotty said at the SFA's annual conference in Dublin Castle.

At the same time, the value of our exports last year was 5 per cent below the 2002 level and Ireland is losing share of the European Union's total exports.

"Amidst all the euphoria about rising house prices, SSIAs and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession," Mr Crotty said. While exports of goods and services accounted for a major part of our income growth at the start of the decade, net exports had a negative impact on economic growth by 2005 and some 30,000 manufacturing jobs have been lost in the last four years.

Ireland's economic boom is now entirely dependant on domestic demand, a source of growth that is unsustainable, the SFA chairman warned.

"In the recent past, the Irish nation has been behaving more like a drug addict than a well-oiled business - high on cheap money," he said.

Minister for Enterprise, Trade and Employment Micheál Martin told the conference that Irish businesses will face increasing competition from major international players with highly sophisticated business models and economies of scale. "From earlier stages in companies' growth cycles, most firms must build the means to do business at an international level," Mr Martin said. "They must have the skills to win international sales and reputations while establishing an overseas presence in core markets."

Mr Crotty called on the Government to introduce a major readjustment to the current tax credit system for research and development in the next budget to help small Irish businesses boost innovation.

The chairman of the National Competitiveness Council, Dr Don Thornhill, told delegates the energy regulator should allow utilities to change prices in response to global trends such as the recent drop in oil prices.

"Other countries haven't quite as rigid a regime as we have here," Dr Thornhill said.

"Energy companies have to apply to the regulator to reduce prices. No company should have to apply to any regulator to cut prices."

Eircom chairman Pierre Danon pledged to make improving the availability of broadband internet in Ireland his first priority as the French businessman embarks on his new role at the helm of the former telecom monopoly.

"I will remain frustrated until this problem is solved," he said.

Mr Danon stressed that countries with high broadband penetration have had assistance from their governments in rolling out exchanges in rural areas.

"Under law, we are not allowed to sell broadband at a loss, but the Government could roll it out," he said. "It may require a public tender."

The Irish Examiner reports that Irish consumers are paying record prices for gas at a time when natural gas is being given away for free on British wholesale markets.

Consumers will on average pay an extra €25 a month for natural gas because of a 34% hike in gas prices which came into place on Sunday.

The increase was approved last month by the Commission for Energy Regulation (CER) following complaints from Bord Gáis that rising gas prices had added €150 million to its costs.

Yet, yesterday British natural-gas sellers were being forced to give the fuel away after the new Langeled pipeline from Norway increased supply at a time when storage sites are full, pushing prices below zero for the first time in nine years.

Gas prices fell below zero as the oversupply forced sellers to pay to get rid of the fuel. Gas for delivery yesterday at the National Balancing Point, the British trading hub, sank to minus 5 pence a therm, according to broker ICAP in London. The contract was trading at 0 pence a therm as of 4pm.

“The Langeled pipe offers more flexibility for us to send gas to the UK or mainland Europe,” Lars Nermoen, a spokesman for Norwegian gas supplier Norsk Hydro ASA, said by phone from Oslo.

The Financial Times reports that EADS on Tuesday night revealed the depth of the crisis in the Airbus A380 production programme when it announced a €4.8bn profit warning and warned of yet another year’s delay in early deliveries of the world’s biggest passenger jet.

The profit warning was more than double the €2bn figure announced less than four months ago and follows an emergency review of the A380 programme begun in July following the dismissal of several top executives at both Airbus and EADS, the Franco-German parent company.

The scale of the delays, now more than two years in total, has dealt a massive blow to the credibility of one of Europe’s flagship companies, and could lead to orders being cancelled by leading international airlines.

Tim Clark, president of Emirates, the leading customer for the A380, said the group was now “reviewing its options” after being told of a further 10-month delay, which meant its first aircraft would not arrive until August 2008. “This is a very serious issue for Emirates,” he said.

Emirates has made 45 of the 159 firm orders booked by Airbus for the A380.

Virgin Atlantic, the UK long-haul carrier controlled by Sir Richard Branson, will next week reconsider its fleet strategy, including possible order cancellations.

Christian Streiff, appointed Airbus chief executive in July, said the group was being forced to launch a restructuring programme, called Power8, aimed at producing annual cost savings of at least €2bn from 2010 onwards and delivering €5bn in cumulative cash savings by 2010.

Airbus was seeking to reduce costs, save cash and develop aircraft faster to regain its competitiveness against US rival Boeing in the face of the continuing weakness of the US dollar against the euro.

Aircraft development cycle times were to be reduced by two years, from eight to six, while overall productivity was to be increased by 20 per cent, said Mr Streiff.

Under the revised plan, Airbus said the first A380 would not be delivered until October 2007. The first A380 should have entered commercial service with Singapore Airlines in March this year and had previously been delayed to December.

The subsequent build-up in production will be delayed with only one A380 to be delivered in the whole of 2007 – down from the 25 originally planned and the nine announced as recently as June. The following year will see 13 deliveries as opposed to the the planned 35.

EADS said the delays would lead to a €4.8bn shortfall in operating profits (at €1/$1.30) compared with its original “baseline plan” for the years 2006 to 2010. Of this, close to €2bn would be earnings postponed to later years because of the delays.

Cost over-runs and penalties for late deliveries would result in irrecoverable costs, cutting forecast operating profits by €2.8bn in the period from 2006 to 2010.

No account in all of its financial estimates had been made for the possible cancellation of orders.

The FT reports that European retailers and manufacturers which fail to pass on to consumers their savings from cheap foreign imports and from moving production offshore will be named by Brussels.

Peter Mandelson, EU trade commissioner, will announce the measures on Wednesday as part of efforts to ensure consumers feel the benefits of globalisation. “The case for openness is undermined if its benefits do not reach citizens,” says a paper to be released today and seen by the Financial Times and its sister paper Financial Times Deutschland.

“The Commission will put in place a systematic monitoring of import and consumption prices before considering further action,” it says, to ensure that “benefits are not captured by specific interests”.

It cites the 2005 liberalisation of the textile market, which led to a surge in Chinese imports. “Prices fell in some member states and not others,” said a Commission official. “We are asking why this is the case.”

The trade department believes that publishing the data will help the media name those with large profit margins, since its ability to affect prices directly is minimal.

“The Commission is calling the retailers’ bluff,” said one retailers’ representative. “They don’t want the blame for manufacturing jobs going and the consumer not seeing a price drop.”

Mr Mandelson hopes to chart a new course for the EU by accepting that globalisation should be managed instead of resisted. A review of anti-dumping rules will be especially controversial. He wants the benefits to consumers of lower prices to be taken into consideration when deciding whether to impose duties.

He will also propose a series of bilateral trade deals, starting with Asia, amid fears among European companies that the US has stolen a march in getting access to the markets of rapidly developing countries. India is among the first in line, while talks with South Korea are under way.

Mr Mandelson wants to open markets in sensitive areas such as government procurement and services.

That will run into huge resistance from campaign groups such as Oxfam, which says such issues were rejected by developing countries during the Doha round of trade talks.

What Mr Mandelson hopes will be the last old-style anti-dumping action, on Chinese and Vietnamese shoes, could be resolved today.

The bloc is divided on duties, and EU ambassadors will meet to try to break the deadlock as interim measures expire on Friday.

The New York Times reports that leading security software companies, including Symantec and McAfee, are publicly pressing their concerns that Microsoft’s new Windows Vista operating system hinders them and steers users to Microsoft’s security offerings.

The security software makers have not made any antitrust complaints, but they have talked to authorities at the European Commission and to the technical committee that oversees Microsoft’s antitrust settlement with the Justice Department, executives at the companies said yesterday.

In Europe, F-Secure, a Finnish security software company, has joined American companies in criticizing the design of Windows Vista, which is scheduled to be available to business customers in November and to consumers in January.

The issues raised by the companies, in interviews yesterday, touch on broad themes of consumer choice and innovations that surfaced in previous antitrust suits against Microsoft.

“We’re trying to make sure that consumers have choice in security software and that future innovation is not prohibited in a Microsoft world,” said Enrique T. Salem, group president for consumer products and services at Symantec.

Microsoft says that it has made changes in Vista from previous versions of Windows, such as not allowing anyone to fiddle with the core, or kernel, of the operating system. Such changes, Microsoft insists, were made to cope with the proliferation of Internet-borne viruses and other malicious software. Most software vandals aim at Microsoft’s desktop products, especially Windows, which runs on more than 90 percent of the world’s personal computers.

With Vista, Microsoft will be entering the $4.4 billion-a-year market for desktop security software — and compete for the first time with companies like Symantec and McAfee. Microsoft insists there will be plenty of opportunity for the security specialists, but the company is taking responsibility for a basic level of security software that is included in Windows.

The shift, said Ben Fathi, Microsoft’s corporate vice president for security, is not an anticompetitive step but merely a response to customers’ pleas “to provide them a more secure, stable and reliable computing experience on Windows.”

“It’s our way of improving the health of the machine,” Mr. Fathi said.

Symantec and McAfee, Mr. Fathi said, are the largest of 150 security software companies that Microsoft deals with. They are the most vocal, he said, because they have the largest vested interest in “the old way of doing things,” which is inherently less secure.

“They need to continue to innovate as well,” he said.

The dispute between the security software companies and Microsoft has been brewing for more than a year, and negotiations are at an impasse. The security companies’ talks with regulators in Europe and the court-appointed technical committee in the United States go back months.

But now, with Vista shipping soon, the companies are emphatically making their complaints public. On Monday, McAfee took a full-page advertisement in The Financial Times in the form of a letter to “computer users around the world” under the headline, “Microsoft Increasing Security Risk with Vista.”

In an interview yesterday, George Samenuk, chief executive of McAfee, pointed to two design features in Vista that he said undermined rivals and led users to Microsoft’s security software.

First, Mr. Samenuk said, denying outside software companies access to the Windows kernel — access permitted in earlier versions of Windows and other operating systems — would make it more difficult to develop innovative security products.

Second, he said Vista would direct users to a Microsoft security console — an on-screen dashboard called Windows Security Center — that could not easily be shut off and replaced with security consoles from other suppliers. “These are two major steps backward for security and for customers,” Mr. Samenuk said.

The security companies say they want an easier way for users to switch off Microsoft’s security console, and a way to provide security software companies authenticated access to the Vista kernel while keeping software vandals out. The kernel lockdown applies only to the more powerful 64-bit versions of Vista, which will gradually take over from today’s 32-bit standard.

Microsoft, industry analysts say, seems to have adopted a draconian approach.

“They are removing choice in the name of security,” said Neil MacDonald, an analyst at Gartner, a technology research firm. “There ought to be a mechanism for introducing trusted code into the kernel. It should be doable.”

Even security companies that are working closely with Microsoft — and not publicly criticizing the company — have their doubts about Microsoft’s decision to prevent all outsiders from dipping deep into the Vista operating system.

Trend Micro, a security software maker, collaborates with Microsoft, including supplying the virus-scanning software for Hotmail, Microsoft’s Web-based e-mail.

Lane Bess, general manager for consumer products and services for Trend Micro, said he shared some of the concerns expressed by Symantec and McAfee.

“But we try to work through any issues we have with Microsoft,” Mr. Bess said, “not by taking a shot across the company’s bow and suggesting that there might be antitrust action later.”

Trend Micro’s concern, he said, is the possibility that limiting access to the Vista kernel could limit the diversity of security-protection tools to fight malicious software.

“I’m not sure that a company that has had as much trouble securing its users from malware as Microsoft should be going it alone,” he said.

The NYT also reports that the best-known measure of the stock market, the Dow Jones industrial average of 30 major stocks, rose 0.49 percent yesterday to squeak past a closing high that was set in January 2000 amid a technology-driven market boom.

In contrast to those heady days, though, investors and market professionals are greeting the current rally with more relief than euphoria, noting that the broader stock market has yet to find its way back to previous highs.

“I am happy that it has now happened so that we can move onto something else,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.

Stocks have been climbing without fanfare since late in July, bolstered by a decline in energy prices and by mounting signs that the Federal Reserve will not raise interest rates again this year.

The spark for yesterday’s gains was a 4 percent drop in oil prices that pushed the next-month futures price of crude oil below $60 a barrel for the first time since March.

In 2000 and the years leading up to it, the rally was fueled by demand for computers and telecommunications and a belief that the Internet would transform business. The rally over the last few months has had more modest roots: signs that the economy is moderating and inflation is tame. Investors have been encouraged that falling crude oil and gasoline prices, while a sign of slowing demand, will restrain inflation and spur consumer spending. And investors have been heartened by what they hope is a gradual and orderly end of a five-year boom in home sales and construction.

Indeed, many on Wall Street argue that the housing pullback and the decline in energy prices has put the economy in a sweet spot: not growing fast enough to accelerate inflation, but not so slowly that it risks falling into recession.

“There is and will continue to be a building sense of a Goldilocks” market, said James W. Paulsen, chief investment strategist at Wells Capital Management.

Charles P. Mayer of Pioneer Investments, a mutual fund company, added that corporate profits were still growing at robust rates, further supporting stock prices.

Still, a significant number of skeptics say that this view does not fully take into account the risks that falling home prices and sales could crimp consumer spending and cause an economic slump next year. These people note that the Dow’s new high is hollow, given that broader gauges of the market have still not returned to their high-water marks.

There is also the reality that the Dow is a measure by dollar value of only 30 blue-chip companies, and so is not representative of the great majority of traded stocks.

Jane L. Caron, chief economic strategy at Dwight Asset Management, a Vermont specialist in bond investing, took a measured view. “There is a lot of concern that the housing market softening will spill over to the rest of the economy,” she said. “But if you look at the stock markets, they seem to think that everything is O.K.”

“Somebody is wrong,” she added.

The Dow industrials closed up 56.99 points yesterday, at 11,727.34, surpassing the record of 11,722.98 set on Jan. 14, 2000 — a day when stocks were buoyed by a strong profit report from Intel and by comments from Alan Greenspan, then the Federal Reserve chairman, that interest rates would rise only slightly.

Most other market measures were also higher yesterday. The broad-based Standard & Poor’s 500-stock index rose 0.21 percent, and the technology-focused Nasdaq composite index rose 0.27 percent. The Russell 2000 index of smaller-capitalization companies was fractionally lower.

Unlike the Dow, the S.& P. 500 index is still about 12 percent away from its record high in March 2000. The majority of those stocks have returned to their 2000 levels, but a large minority — including technology stars like Cisco Systems, Sun Microsystems and JDS Uniphase — are trading at a fraction of their prices six years ago. The Nasdaq composite index is still down about 55 percent from its March 2000 peak.

Seen another way, the stock market has spent the last six years exorcising the effects of the technology bubble, Howard Silverblatt, Standard & Poor’s senior index analyst, said. He noted that without the technology sector, the S.& P. 500 would be up 17 percent today. Though not a spectacular return for six years, it would be a far better outcome for investors than a 12 percent decline.

And by some measures, the Dow still has some way to go before it can be said to have reclaimed its previous heights. On an inflation-adjusted basis, the average would have to reach a level of 14,104.97 for it to match its January 2000 peak.

Only 10 of the 30 stocks in the Dow today are at or above their levels when the index last reached its high. Most of the highfliers from the late 1990’s and early 2000, including Microsoft, I.B.M. and Intel, are a long way from the lofty levels they were trading at then. Even companies like Home Depot, Alcoa and Merck are down more than 30 percent.

“This has been a really rotten five-year period,” said James K. Glassman, a fellow at the conservative-leaning American Enterprise Institute and an author of the 1999 book “Dow 36,000.”

“It really has, there is no doubt about it,” said Mr. Glassman, who maintains that his book was mischaracterized at the time as a forecast for the market. He argues that the fear of terrorism has held down stock prices.

Still, the Dow components that have led the charge back have done exceedingly well. The price of Altria, parent company of Philip Morris, fell to a five-year low early in 2000 because of its multibillion-dollar legal liabilities, but it has more than tripled since. The shares of Caterpillar, United Technologies and Boeing have soared because of strong global demand for their heavy industrial products. Exxon Mobil, the world’s largest publicly traded oil company, is up almost 60 percent on the rise in energy prices.

The last time the Dow inched close to the record, early in May, stocks tumbled from India to New York as investors worried that the Federal Reserve, in its eagerness to curb inflation, would raise rates so much that it would push the American economy into recession and precipitate the end of an era of relatively cheap financing worldwide. The Dow industrials fell more than 8 percent and the Nasdaq composite by 11 percent at the start of the summer.

A few months have made a lot of difference. The Fed left its benchmark short-term rate unchanged at 5.25 percent in its last two meetings, on the rationale that a slowing economy and its two-year campaign to raise rates might be enough to lower prices. Indeed, inflation has slowed and data for September is widely expected to show a further drop because of the recent fall in energy prices. Nationally, average retail gasoline prices are at $2.36 a gallon this week, compared with just over $3 at the start of August.

Declining home sales and construction activity has helped slow the economy without causing any major retrenchment, at least so far. The economy grew at a 2.6 percent annual pace in the second quarter after a 5.6 percent increase in the first three months of the year.

Bond investors remain somewhat more skeptical than stock buyers. The yields on long-term Treasury bonds, for instance, indicate that investors are assuming that the Fed will have to reverse course soon and cut interest rates to resuscitate the economy.

The yield on the benchmark 10-year Treasury note, which moves in the opposite direction from the price, has fallen to 4.61 percent, from 5.25 percent late in June. Investors demand higher yields when they are worried that inflation will eat deeper into the value of their holdings, and they push yields down when they think that interest rates are headed lower or when they are seeking shelter from tougher times.

Market historians have noted that stocks can take a long time to recover from periods of great excess. The Dow and the S.&. P., for instance, did not return to their 1929 pre-crash peaks until 1954, long after the Depression and World War II ended.

All this does not mean that investors have stood still in the last six years. Many foreign stock markets, especially those in developing countries, have outperformed American markets, as have commodities like oil, gold and copper. In the United States, the stocks of smaller companies have outrun larger ones, though that trend appears to have reversed this summer.

Data on investment fund flows show that Americans have invested more in those faster-growing areas. They have also spent increasingly more on home purchases and improvements, as evidenced by the large run-up in housing sales and prices and the sharp increases in mortgage and home equity lending.

Will the Dow’s new record prompt skeptical investors to reconsider stocks, perhaps giving them a psychological boost? Momentum can help propel stock markets, but investors could also conclude that the Dow’s return to its early 2000 level means that the index has merely been treading water for six years.

“You’re telling me that I have gone six and a half years and gone even,” Mr. Silverblatt of S.& P. said. “What about the 19 percent inflation? Well, it’s better than being down, but it’s not as positive as you think.”