We discuss a new method for setting limits on small signals in the presence
of background noise. The method is based on a combination of a two dimensional
confidence region and the large sample approximation to the likelihood ratio
test statistic. It automatically quotes upper limits for small signals and
two-sided confidence intervals for larger samples. We show that this method
gives the correct coverage and also has good power.Comment: Document was created by Sciword V3.0, it consists of one main
document (lrt.tex), eight figures (figure1.eps - figure8.eps) and one table
(table.tex). Paper was revised after being accepted for publication in NIM A
Paper was revised after being accepted for publication in NIM
