Moves by State agencies to attract people living overseas to fill jobs in the Republic are a "gross misuse" of taxpayers' money, according to ESRI economist Mr Terry Baker.

Writing in the ESRI's latest quarterly Economic Commentary he questions the involvement of State agencies in foreign recruitment. However, last night Mr John Lynch, the director general of FAS, defended its campaign to attract 10,000 people back home. He said there were jobs to be filled and it was only right that people who emigrated in years of high unemployment should be informed.

However, Mr Baker insisted that Government agencies should not be using taxpayers' money to attract workers for private firms in areas such as building and construction.

"If companies need to recruit abroad to continue growing at speed they can go and recruit abroad. But it is a gross misuse of taxpayers' funds and is a hangover from when we wanted the maximum number of jobs created. There is a great difference between creating jobs for unemployed individuals here and doing it for immigrants, whether Irish or not."

Last week, FAS participated in a jobs fair in Germany in a bid to attract Irish and other EU workers here to work and is to attend other fairs in the months ahead. According to a spokesman for FAS it is obliged under the Treaty Of Rome to inform people of job vacancies so as to encourage labour mobility across the EU.

"The amount of money is only around £15,000 and the job fairs are part of a system we have been a member of for 15 years. This is the first time we have been looking for people to work here, all other years we have been trying to find vacancies for Irish people in Germany."

A spokesman for Enterprise Ireland said it was "actively encouraging" Irish immigrants to return. "We do not give them jobs, and primarily we are there to encourage new start-up companies with potential to grow sales rapidly and therefore increase employment."

Looking at the run up to negotiations on a new national agreement, he stresses the State now has the funds to spend on social issues.

Talking to The Irish Times following the publication of the report he said the "important thing" was to change the mindset. "We can afford things we used not to be able to. At the same time unemployment is set to fall below 6 per cent so there is no reason to focus on maximum job creation which also puts pressure on other resources such as housing and transport."