The Minister for Finance, Mr McCreevy, has once again signalled that the Government would take a tough stance in the forthcoming Budget.

Addressing the Institute of Bankers annual dinner in Dublin last night, Mr McCreevy said he will be pursuing a "sustainable budgetary path suitable for the needs of our time".

He said has now met with a number of bodies and organisations to discuss their pre-Budget submissions, which have called for different courses on taxation, expenditure and pay, with some advising that he should run a modest deficit.

"The problem, as all financial controllers know, that it doesn't take long to turn a modest deficit into an unmanageable one, especially when the business climate sinks further. Deficits are easy to get into but much harder to get out of. That was our experience of the past 25 years."

The Minister also called for individuals to be realistic in terms of negotiations on any new national wage agreement.

"As I said to the social partners, we need to be realistic on pay developments in any agreement and to base our expectations on the reality facing us." Pay increases should be kept below our competitors, he said, and added this was the way to secure future growth.