The North West Red Squirrel Group (NWRSG) said the issue is affecting Muff Glen, a scenic area to the north-west of Derry.
The group has appealed for people to inform them of any sightings via its Facebook page (@NorthWestRedSquirrelGroup).
It suggested that the expansion of the City Cemetery and subsequent removal of trees, which act as a corridor for red squirrels, may be a reason for their disappearance.
Describing the grey squirrels as “rats with furry tails”, NWRSG vice-chair Pam Hardeman said: “They’re twice the size and bully the reds off feeding stations and tables. We didn’t have any, then within six months they were everywhere. They swamp the areas.
“They move from woodland to woodland, looking for food, coming into people’s gardens and totally destroying birdfeeders, stripping bark off trees — and that tree’s dead then. They are very destructive animals.
“[Workers] are expanding the City Cemetery and removing trees. The corridor to the feeder is gone now. When they’re managing forests, they need to make sure there are no red squirrels about.”
The grey squirrel was introduced to Co Longford in 1911. Twelve grey squirrels, sent from England as a wedding present, spread across the border by the 1960s, reducing the red squirrel population from 3.5m to 120,000.
Grey squirrels will usually replace the red squirrel population in an area within 15 years by outcompeting them for food and space and passing the squirrel pox virus, which kills the red squirrel but has no known lasting effect on the grey squirrels.
“Places like Prehen Wood had reds 10 years ago and the greys moved in. There are at least 250,000 in Ireland now. They outnumber reds at least 20 to one,” Pam added.
“In Muff Glen, monitoring equipment and three feeding areas have been up since 2013. If there are greys in the area and they’re seen as a threat, we set humane traps.
“The main thing is the squirrel pox virus, if they’re both feeding in the same area. They also carry other diseases and, if bitten by them, they can cause nasty reactions.
“Red squirrels are such beautiful creatures. When they contract the pox, they’re dead within two weeks. It’s horrible: they go blind and get poxes on their heads. We haven’t had that problem in Muff Glen, but there’s nothing to say that it can’t happen”.
Last year, a conservation project carried out by The Ballygally Biodiversity Group (BBG), Belfast Zoo and Ulster Wildlife successfully reintroduced red squirrels in Carnfunnock Country Park in Co Antrim.
The park saw red squirrels breeding for the first time in more than 30 years by sectioning off feeding boxes and monitoring the squirrels’ activity.
Pam outlined that it can be situationally difficult to make certain reintroduction efforts.
She added: “Belfast Zoo will reintroduce reds into certain woodland, but it has to be the right sort of woodland.
“It has to have a ring fence, there can’t be greys for at least two years, and there has to be people on the ground to get rid of them. We encourage anyone around Muff Glen, if they see a grey squirrel, to contact us and we can remove them.
“A pine marten has been shown to help the red squirrel population, because greys don’t recognise it as a predator. But you can’t just introduce one. It might not be the right habitat.”
Ulster Wildlife priority species officer Ross McIlwrath said: “Red squirrels have slowly recovered across Northern Ireland in recent years, thanks to the fantastic efforts of volunteer groups like the NWRSG.
“However, they are still under constant pressure from the introduced invasive grey squirrel.”
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