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Stormont officials are trying to find projects eligible for an £18m European Union grant after the EU objected to the funds being applied to Titanic Belfast.

The EU refused to subsidise the £90m project, citing a lack of competition in the tendering for the construction of the building.

Talks are under way with the EU to identify suitable alternative projects.

The money must be spent by 2015 in line with the grant conditions.

The Titanic building is the most expensive tourism project ever built in Northern Ireland and was financed from a number of different sources.

Belfast City Council gave £10m and the Harbour Commissioners and the development company Titanic Quarter Limited both spent more than £10m.

However, the biggest slice of funding, more than half, was due to come from the Tourist Board and the Department of Trade and Investment (DETI).

DETI had applied for grants of 24m euros (just over £20m), including one for £18m from the European Union.

DETI and the Department of Finance are working to resolve the problem.

Officials from both departments briefed Stormont's finance committee on the dispute in a closed-door session on Wednesday.

Sources told the ´óÏó´«Ã½ that MLAs were informed that Stormont could fight a legal battle with the EU over the Titanic funding but this could be lengthy and costly, with no guarantee of success.

Instead, it is hoped suitable alternative projects can be found.

That way, the executive can fund the Titanic shortfall while winning matching EU funding for a road or rail or some other project.

"They think they are on the right lines and could take the European Commission to court over it, but they don't want to waste time and are looking at other projects," said one source.

The challenge however will be to spend the money by 2015.

That means identifying projects - or a single project costing around £36m - that is already in the pipeline and eligible for matching funding.

The source indicated that the projects would have to be identified before the end of the year.