The country's biggest children's hospital is asking staff to take unpaid leave as it tries to find €6m in savings.

Our Lady's Hospital for Sick Children in Crumlin, Dublin, has been forced to reduce the number of operations it carries out because of a funding cut. Now it has asked its workers to take a break in the summer.

The Health Service Executive (HSE) gave the hospital a financial allocation of €137.9m this year, down 4pc on the 2008 figure.

The hospital, the national centre for children with heart disease, said the effect of the cash shortfall would be "fully assessed" before the options open to it are implemented.

Impact

It is preparing a break-even plan for 2009 which "will seek to protect in as far as possible services for its sickest children".

A spokeswoman said: "To minimise the impact on children's health services, one of the options being considered would be to reduce elective activity in the summer months.

"To assist on achieving this, the staff of the hospital are being asked for their voluntary expression of interest in relation to taking unpaid leave." The news has come a day after it emerged Health Minister Mary Harney had sanctioned higher salaries for hospital consultants, costing the exchequer a net €72m.

And the HSE has yet to announce its €1.1bn cost-cutting plan, which will lead to yet more reductions in hospitals.

Dublin's main hospitals have had their budgets cut by nearly €30m already this year. Reductions have also been imposed on acute services in the north east, mid west, north west and south.

Irish Nurses Organisation deputy general secretary Dave Hughes said the scale of the spending cutbacks was "catastrophic".

Mr Hughes said the scale of the cuts was beyond anything witnessed in the country before.

HSE finance director Liam Woods said the organisation was trying to cope with a huge rise in medical card holders and a fall in the health levy.

Mr Woods said the challenge facing the HSE "is the challenge facing the economy".

Admitting he has private medical insurance, he said it is "a means of providing space in public hospitals" rather than a lack of confidence in the public health service.

comurphy@herald.ie

- Cormac Murphy