'Celtic Cup' agreed in principle

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The agreement was announced on the Football Association of Ireland's website and commits the countries to arranging three tournaments, played on a league basis.

Home and away games will be rotated from one tournament to the next, in the manner of rugby union's Six Nations, with each team playing three matches per tournament.

Commercial arrangements and fixture dates are now being finalised.

The statement was signed by Howard Wells, chief executive of the Irish Football Association, FAI chief executive John Delaney, Scottish Football Association chief executive Gordon Smith and Football Association of Wales general secretary David Collins.

There had been hopes England would also be included following their failure to qualify for Euro 2008 and Scotland manager Alex McLeish admitted on Sunday their inclusion would make the competition more attractive.

"I'm not 100% in favour of it but I can see the positives," McLeish said. "I'd love to play England but perhaps they feel they have bigger fish to fry."

The Welsh, however, are enthusiastic backers and the competition will provide useful funds for all four associations, none of whom qualified for Euro 2008 and are a long way from guaranteed a place at the 2010 World Cup.

Scotland just missed out on the European Championships when they lost their final match 2-1 to world champions Italy but have not qualified for a major tournament since the 1998 World Cup.

Northern Ireland have not featured at a finals since 1986 while Wales have only the 1958 World Cup on their record books. Of the four teams, the Republic of Ireland most recently appeared at a major tournament but they were rarely in contention for Euro 2008 and have been drawn with Italy for 2010 qualifying.