A major battle is underway by the Irish government and others to secure the $15 million funding by Congress for the International Fund for Ireland (IFI) which funds peace and reconciliation efforts in Northern Ireland.

The attempt to have the U.S. funds for the IFI renewed is facing tough obstacles, not least of which is an attempt by another organization, the US-Ireland Alliance, to appropriate $5 million of the money for its activities.

In addition, budget cutting Republicans are keen to cut IFI funding. The key Republican seeking to cut is Congressman Jason Chaffetz of Utah, a close friend of Fox News star Glenn Beck who has slammed funding the IFI on air.

The US-Ireland Alliance is an organization that sends 12 students to study in Ireland on Mitchell Scholarships every year, and also hosts a lavish Hollywood party for Irish American stars during Oscar season. The scholarships are named after former Senator George Mitchell, who played a key role in the Irish peace process.

The alliance’s executive director Trina Vargo is currently lobbying hard on Capital Hill to have at least $5 million of the money redirected to her organization, which recently lost $1 million from its $2.7 million funding after stock market setbacks.

Proponents of the IFI, which include the British and Irish governments, and all the leading political parties in Northern Ireland, are furious at the effort to remove money from the peace process, and continue to make their case strongly in Congress that the funding should continue to be given to IFI projects and not be terminated or given to the US-Ireland Alliance.

However, the alliance has stepped up its efforts to shift the money over to them. In a communication seen by Irish Central.com, Vargo told staffers on Capitol Hill that she believes the IFI funding comes down to either a total end to funding, or $5 million for Mitchell Scholarships as a compromise. That $5 million, she believes, would allow her to “leverage” matching funds from the cash-strapped Irish government.

Vargo has also run foul of many staffers and representatives on Capitol Hill with her aggressive pursuit of the funding for the Mitchell scholars. “She is very confrontational,” said one. “She will tell you, ‘You don’t know what you are talking about.’”

A key figure on securing the funding will be incoming Friends of Ireland chairman Congressman Peter King, now the powerful House Homeland Security Committee chairman.

He is believed to strongly favor extending the IFI funding, given the recent resurgence in dissident IRA violence in Northern Ireland and the need to bed down the peace there.

The IFI money was set to be appropriated in the last Congress when Congressman David Obey, who oversaw the funding as head of the Appropriations Committee, visited Northern Ireland and came back convinced it was needed.

However, no budget was passed amid continuing resolutions, and the final budget package is now set for March 4. In the meantime the Republicans have taken over the House.

There are three possible outcomes -- no more funding, funding for a couple of extra years, and funding to be given to the US-Ireland Alliance instead, say insiders.

Which outcome it will be is still hard to predict. Secretary of State Hillary Clinton is said to be lobbying to have the money continue to underwrite the peace process.