PRC Controller described a conflict event alleging a new directive prohibiting RADAR services outside of Class D airspace was the primary causal factor leading to this event.

Narrative

Q400 on an approximate 8 mile final at 8;500 descending; advised they were climbing in response to a TCAS/RA. A target appeared northeast of HUMPTY Intersection; not in communication with PRC Tower or ZAB 43 apparently on a practice ILS approach outbound from HUMPTY. Data block indicated the aircraft was at 8;000 FT. Local Hub Manager has directed PRC Tower to not provide RADAR services outside of Class D airspace. To comply; most controllers now range down to 6 to 8 mile range on STARS. If we were allowed to comply with 7110.65 in providing basic VFR RADAR advisories; this event would likely have not occurred. Normally the subject aircraft would have been in communication with PRC Tower and given RADAR traffic advisories. If not for the TCAS/RA from Q400; this would have definitely been an NMAC if not a mid-air collision. The directive goes against all common sense and should be rescinded immediately to allow us to do our job as defined and provide the service to the user. There have been many comments and situations which go unreported because of this directive.