Londonderry's selection as the UK's first City of Culture is a fitting tribute to all those who have worked for peace through its troubled past, Northern Ireland's Deputy First Minister said.

Martin McGuinness said the accolade ensured his native Londonderry could now look to a brighter future.

"This is a gift to the peacemakers," an emotional Mr McGuinness said after the result was announced.

Londonderry saw off stiff rival bids from Birmingham, Norwich and Sheffield to be crowned UK City of Culture 2013.

The title, which comes with no government funding, is designed to help areas boost their economy through tourism and the creative industries.

The news was met with jubilant scenes in Northern Ireland's second city.

It will also provide a much needed fillip for the entire region in a week where violence returned to the streets in the form of widespread rioting in a number of republican areas.

Londonderry witnessed much suffering and bloodshed during the troubles and the city is still marked by deep sectarian divisions, but in recent years strides were made to bring Protestant and Roman Catholic communities closer together.

"This is fantastic news for the city and the entire region and I am immensely proud of what has been achieved," Mr McGuinness added.

"The task that now lies before us is to ensure that the announcement will provide a similar catalyst for my home town to avail of the potentially massive benefits culturally, economically and socially for all our people."

The competition was launched by the last government following Liverpool's success as European Capital of Culture in 2008.

Londonderry will not receive any government funding but, as holder of the City of Culture title, can expect to stage a number of nationally significant events.

Liverpool's tenure saw it play host to events ranging from the Turner Prize to the MTV Europe Music Awards.

Londonderry's bid was backed by band Snow Patrol and high-profile names such as poet Seamus Heaney.

Stormont First Minister Peter Robinson said the award was a tremendous achievement and praised the bid team that delivered the victory.

"To have beaten off stiff competition from a number of other major UK cities is a tremendous achievement and is reflective of the bid team's enthusiasm and professionalism," he said.

"The northwest, and indeed Northern Ireland as a whole, basks in the glory of their achievement.

"This success portrays Northern Ireland in a positive and inspirational light and is indicative of what we can offer the world both culturally and socially."

The year of culture will coincide with the 400th anniversary of the building of the city's famous fortified walls and local people intend to mark both in style. Colum Eastwood, the mayor of Londonderry, said the title would leave a lasting legacy for the city. "This will bring the jobs, the investment, the regeneration that we need," he said.

The winner was announced by UK Culture Minister Ed Vaizey.

TV producer and writer Phil Redmond, who sat on the Independent Advisory Panel, said: "I have no doubt that Londonderry will follow Liverpool and show what impact, what step change, a year in the media spotlight can bring about."

Congratulations also came from the Republic of Ireland with Irish premier Brian Cowen putting the victory down to a great cross-community effort.

"It is a tremendous achievement that will allow Derry and the North West to show the wider world how far it has come and how much it has to offer," he said.

Actor James Nesbitt, one of a number of celebrities who backed the city's bid, said the award acknowledged Londonderry's rich cultural heritage.

"This decision confirms what many of us in the province and further afield have known for many years - that Derry-Londonderry is a cultural powerhouse," said Mr Nesbitt, who is now chancellor of the University of Ulster, which has a campus in the city.

"Whether it is writers like Seamus Heaney and Seamus Deane, songwriters and performers like Phil Coulter or the Undertones, artists like Willie Doherty, film-makers like Margo Harkin and Tom Collins, or actors like Amanda Burton, Roma Downey and Bronagh Gallagher, the city has asserted a huge influence on the arts internationally.

"It is great to see creativity and talent being recognised and rewarded and I know the university is looking forward to playing its part in a programme of events which will do Derry-Londonderry and the province proud."

In Liverpool, Londonderry resident Carmel McCallion was invited to join her city's party with grandchildren Megan, seven, and four-year-old Dara.

The family was visiting relatives in Liverpool and had travelled to the Pier Head with a home-made banner supporting their city. Mrs McCallion said: "It was absolutely fantastic to see Derry win... I just hope people will now see Derry in its true light.

"Hopefully we will get a lot good publicity from it and a lot of jobs."

Megan said: "Derry is really great and the people are very friendly."

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