To her surprise, the children could not do it, because they simply could not remember seeing the army personnel carriers. “It was an indication,” a colleague said, “of the first generation of kids growing up completely unaware of soldiers and the troubles. Now all of that has been put at risk.”

The Canary Wharf blast which killed two men and caused an estimated Pounds 100 million damage means the peace dividend of cash savings from the province’s security budget may also be shattered. Even before last week’s bombing there were signs that the dividend was drying up. Now teachers’ leaders fear education cuts could follow if terrorist attacks continue.

A week before last week’s explosion, Ulster’s education minister, Michael Ancram, revealed that the dividend for the coming financial year - Pounds 48 million for new buildings - was down from Pounds 63m in 199596. The number of major projects approved is down from 27 to 11.

There is already a backlog of capital schemes, aggravated by a moratorium two years ago on new building.

More than Pounds 25m will provide new buildings for 2,000 secondary pupils, including those at St Malachy’s in Castlewellan. An extension to Limavady Grammar will cost Pounds 6.4m and at Grosvenor in Belfast Pounds 4.4m. Five new primary schools and an extension will take up Pounds 11m of the new money.

Three further education schemes were approved in 199596, but no FE or library projects are proceeding next year. Only Pounds 300,000 is available for a single youth club, compared with five such projects last year.

Mr Ancram argued that the spending announcement was still good news for schools and the construction industry. “This Pounds 43m package will lead to further improvements in the schools’ estate, in addition to the ongoing capital programme of some Pounds 66m on major works over the next three years.”

David Allan, general secretary of the Ulster Teachers’ Union, which campaigned for peace dividend money to be diverted to education after the IRA ceasefire in August 1994, said it would be churlish to criticise the minister in view of the bombing.

“The estimated cost of damage is Pounds 100m and the capital budget for next year is Pounds 43m - that puts the damage in perspective. You can’t blame the Government if cuts are made to pay for terrorist damage and overtime by the security forces. The blame lies squarely with those who detonated the bomb. ”

Tom McKee, of the National Association of Schoolmasters Union of Women Teachers, warned the return of violence could mean a resumption of a three-year freeze on all capital projects in schools and colleges. “If the peace process was to collapse, the first victim would be the schools which have already been identified as having very pressing needs,” he said.

The Irish National Teachers’ Organisation said it still intends to hold its major congress in Belfast in April. And the union, the only cross-border teachers’ group, said it will redouble its efforts to develop such links.

Northern secretary Frank Bunting said: “The effect of the bomb is psychological more than anything else, but it is up to us to continue our efforts to promote peace in anyway we can.

“We have already set up a NorthSouth working party looking at the whole area of common interests in education and to see how links could be expanded and that will go on. But there are real financial problems and any loss of the peace dividend or grants from Europe could certainly cause great difficulties. ”