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The Stormont Executive could take over the cost of running City of Derry Airport from ratepayers, the economy minister has said.

Conor Murphy said his department intended to assume responsibility for annual running costs of around £3.45m.

The airport, at Eglinton, is owned by Derry City and Strabane District Council which has previously raised concerns over future funding.

Speaking in the assembly on Tuesday, Mr Murphy said taking that funding responsibility away from the council could allow it to invest in other areas.

He did not set out a timeline for when that would happen but said:

"It is our intention in terms of the airport's strategic, regional, economic presence and what that means for the north west generally that the Department of Economy (DfE) assumes responsibility for that.

"We need to work through the arrangements for all that.

"That would lift that burden that the ratepayers of Derry City and Strabane Council have been carrying on their own, even though the airport serves other council areas and other geographical areas as well, so it is and, of course, that will, in turn, allow the council to use that money for other purposes, hopefully develop economic prosperity within the council region."

In a statement, the Department for the Economy (DfE) said it was working with colleagues at the Department for Infrastructure (DfI) to take responsibility for funding of the airport.

"This will enable the Derry City and Strabane Council to reinvest the £3m funding in initiatives to support regional balance.”

The funding pledge has been welcomed by the council.

A spokesperson said council and airport officials were continuing to engage with relevant government departments on the detailed arrangements for the funding.

"The council welcomes the government’s recognition of the strategic importance of the airport to the city and region in terms of the significant role it plays in economic connectivity and providing local employment," the statement added.

Financial journalist Paul Gosling told 91�ȱ� Radio Foyle's North West Today programme that this could potentially save the council between £1.9m and £3m a year.

However, he warned that it would not necessarily mean a reduction in people's domestic rate bills or that the council would no longer financially support the airport.

"It still has various costs," he said.

"One of which is that it still has the borrowing to repay, which is £1.3m a year and there is another £250,000 of other revenue costs the council will continue to pay.

"What this does mean is that the burden of the airport is to a large extent lifted from ratepayers and the airport is pretty much guaranteed for the next five years.

"It also means, rather than ratepayers having a lower bill, it means the council can now focus on other things which they couldn't focus on because of the costs of the airport like supporting the City Deal and development of Templemore sports complex."