Ireland is to postpone funding for a 800 million pound motorway to the Northern Ireland city of Londonderry as part of budget cuts under its EU/IMF bailout, state broadcaster RTE reported on Wednesday.

The 88-kilometre road, which would link the Irish county of Monaghan to Londonderry, would also serve the north west county of Donegal, one of the poorest regions in the Republic of Ireland.

The government on Thursday will announce plans to postpone its promise to contribute half of the cost of the road, agreed under the 2006 Saint Andrew's Agreement between the British and Irish governments, RTE reported.

Asked if the funding had been cut, Transport Minister Leo Varadkar told parliament that the matter would be discussed with officials from Northern Ireland next week.

He described a proposed 560 million euro contribution from the Irish government as an enormous commitment and said some work on the project would be undertaken before 2016.

The government last week announced it would cut 750 million euros of capital expenditures as part of 3.8 billion euro austerity measures to be implemented under the 2012 budget.

The cuts are required under the terms of an 85 billion euro bailout from the International Monetary Fund, the European Central Bank and the European Commission.

($1 = 0.622 British Pounds)

(Reporting by Conor Humphries)