"MONSIGNOR Denise Faul has failed to resolve a dispute between the executive of Families Against Intimidation and Terror (FAIT) and the recently ousted founder of the organisation, Ms Nancy, Gracey.

At the request of a FAIT executive member, Mr Tom Campbell, Mgr Faul agreed to mediate between the two sides in search of a compromise that might allow Ms Gracey to rejoin the organisation.

The FAIT executive this week passed a vote of no confidence in Mr Gracey after she ran up £800 in expenses on a trip to the US funded by an American peace promoter, Mr Tom Tracey.

FAIT said these expenses were irregular, although Ms Gracey said she had inadvertently claimed them. She offered to pay back the £800.

Mr Campbell said yesterday he requested Mgr Faul's intervention because he was concerned that the controversy was deflecting public attention from the real focus of FAIT, which was to assist victims of republican and loyalist paramilitaries.

Ms Gracey was unavailable for comment yesterday, but Mgr Faul told The Irish Times he was unsuccessful in his attempt to persuade Ms Gracey to participate in mediation.

He said Ms Gracey felt "let down and saddened" by the way the issue had been treated. She felt "there was no going back" to FAIT. Mgr Faul said the £oo would be paid back to FAIT within a week.

"Nancy said she wanted to give up her human rights work altogether. But I told her not to, that she should keep her phone line open, and help those victims of the paramilitaries who seek her assistance, as she has done so ably, over the past six years. I think she will agree to do that."