Local councillors have warmly welcomed the grant, which will be used to help reconstruct Lower Market Street, where the bomb exploded.

Chief Executive of Omagh District Council, John McKinney, said: "This is very timely, coming just as demolition work is complete and we are about to try and move forward."

He said some of the money would be spent on creating a memorial to the victims of the bomb.

"Most people would like to see some sort of reflective area, but they also want to see something different there. They don't want to have to look at that street and see it how it was on 15 August 15."

A 50-strong delegation from Omagh, made up of people directly affected by the bomb, were in Dublin on Tuesday to meet the Irish Prime Minister Bertie Ahern.