Northern Ireland Secretary Peter Mandelson has said the government is about to enter talks with RUC staff bodies to discuss the financial packages that will lead to the reorganisation of policing in the province.

During a visit to Omagh on Monday, Mr Mandelson said: ''The government is prepared to be generous.''

The discussions with RUC staff associations, which begin on Tuesday, will focus on the levels of financial compensation to police officers who will be affected by the introduction of a raft of reforms to policing.

The secretary of state is then expected to give further details to the House of Commons on Wednesday when he is due to make a statement to MPs on the government's plans for implementation of the Patten Report.

The Police Authority for Northern Ireland has welcomed the secretary of state's comments.

It said it was vitally important that officers receive financial recognition of their service to the community and recompense for their loss of employment.

The Patten report contains 175 recommendations for major changes to the way Northern Ireland is policed and includes many controversial proposals for changes to RUC insignia, name and uniform.

Unionists were outraged by many of Patten's recommendations. Sinn Fein said they did not go far enough and demanded complete disbandment of the RUC.

During his visit to Omagh on Monday, Mr Mandelson said that paramilitaries must give up their guns if all sides in Northern Ireland were to keep on backing the Good Friday Agreement.

He said the "enormous political progress" of the past few weeks had created the circumstances in which "we can reasonably expect arms to be taken out of politics for good.

'Courage and unity'

"But all of the Agreement must be implemented, including decommissioning, if all sections of the community are to continue to support it."

Mr Mandelson told business people the courage and unity of those who rebuilt the town, where 29 people died in a dissident Real IRA car bomb attack in August 1998, was an example to all.

"What Northern Ireland stands to gain from peace is nowhere more apparent than in Omagh," he said.

"Nowhere better represents the journey of Northern Ireland out of its dark and isolated past and into a better future than Omagh. Nowhere warns us more starkly of the terrible price of failure."

The secretary of state stressed disarmament must happen.

"Like the decision to trigger devolution, decommissioning is a voluntary act. But it is an obligation under the Good Friday Agreement," he said.

Ulster Unionist leader David Trimble won 58% backing from his party's ruling council in November to enter a power-sharing government with Sinn Fein without prior IRA disarmament.

But he vowed to resign as Stormont First Minister if the IRA had not started to decommission before the UUP council assesses the situation again. It meets on 12 February.