DUBLIN businesses are set to lose millions of pounds as a result of last night's decision by taxi drivers not to return to work.

Hundreds of thousands of pounds will be lost in the space of just a few hours tonight as late night shopping is abandoned because of empty taxi ranks.

And with the Christmas rush set to start in earnest this weekend, city shops, pubs and restaurants fear tonight's losses could eventually rise to more than £5m.

At a mass meeting in Dublin last night, taxi drivers rejected the terms relayed to them by their leaders who met earlier in the week with Junior Minister Bobby Molloy.

Vincent Kearns, vice president of the National Taxi Drivers' Union, said: "We went in with an open agenda and delivered it to our members tonight. They have told us that that is not sufficient.

"There is no possibility of anyone going back to work unless a reasonable resolve is found," he said after the 2,000-strong meeting in the National Stadium.

Cork's City Business Association said the strike was "turning into a nightmare for traders" and was resulting in shoppers turning to provincial towns.

Trade has also been hit in Galway, although unlike Cork and Dublin there has been greater support for the local taxi industry, with many customers feeling reluctant to switch from a particular driver to a hackney service.

In Dublin, the Licensed Vintners' Association said city centre pubs were facing huge losses because of the continuing strike.

By EUGENE MOLONEY and BEN QUINN