RTÉ's director general, Mr Bob Collins, declined a €62,000 salary increase last year due to the funding crisis at the State broadcaster.

It was an unusual decision, but one which underlines the depth of the financial crisis facing the company.

Mr Collins was paid €151,000, down from €165,000 in 2000. Under the Haye review of public service salaries, he was entitled to receive €213,000 last year. This was not applied. The director general is among the senior executive team none of whom received a bonus last year.

As the company revealed a €70.9 million deficit yesterday, it was clear that it had no time to waste in seeking a €45 increase in the licence fee from the new Government. Barely half a week after the outgoing Coalition received the electorate's endorsement, the company was knocking at the door for a solution to its funding crisis.

Arguing that he is unable to plan ahead on the basis of its current uncertainty, it wants a definitive solution to the difficulty. Its message was clear. The chairman of the RTÉ authority, Mr Paddy Wright, said: "The rise in the television licence fee from €88.88 to €107 was both welcome and necessary but it was not enough."

The outgoing arts Minister, Ms de Valera, indicated that the increase last year was an interim one, which would be reviewed in July next year. But RTÉ said yesterday that it needed a decision before the end of this year. The company said it could not continue to drain its cash reserves for day-to-day purposes. "Without question for us to go forward in a proper manner we're going to need the full €45," Mr Wright said.

A reduction in its net staff level of 480 and work practice changes would cut its operating deficit this year to €20 million from €46 million. Some €21.5 million of the overall deficit last year arose last November from an "emergency" programme aimed at cutting costs.

Morale was low and with advertising revenues still under pressure, Mr Wright said the company could do no more. He added: "I don't think we're talking about a deficit any more. If we don't get an increase in the licence fee it will be the death-knell for RTÉ."

As chairman, Mr Wright is more a business than a cultural figure. The former Smurfit executive is also a director of Aer Lingus, another State company with large losses and outdated structures to manage. Thus he had sympathy with the view of the Government's consultants at PricewaterhouseCoopers (PwC) who said in a report last year that many of the company's structures and work practices were archaic.

But these matters had been addressed, Mr Wright said. RTÉ had done its share - now the Government had to deliver.

As he put it, there was a choice between supporting public service broadcasting or withdrawing from certain services.

If pushed to the limit, there would be little point in ploughing on because a decline in programme quality would not be supported by viewers and listeners leading advertisers to shun the station.

This was not an option. Neither would the possibility of farming out all television production work bar news and current affairs to independent companies be considered.

This was one of the proposals contained in an interim report by the Irish arm of KPMG Consulting and the British group Logical Consulting. It has already been rejected.

The final report will be discussed at a meeting of the RTÉ Authority today. It is considered likely to elaborate on the two alternative interim proposals of continuing with the current structure or increasing the use of independent producers.

This report will form the basis of RTÉ's renewed application for an definitive index-linked licence fee increase to the incoming Government.

On the basis of yesterday's briefing, it is expected to be lodged sooner than later.Last year's figures are clear enough. Released because they were contained in the company's submission to the Forum on Broadcasting, they revealed that RTÉ's overall deficit grew to €70.9 million in 2001 from €14.2 million in 2000. Operating losses increased to €46.2 million from €21.7 million. Overall revenues fell to €258.24 million from €268.65 million. A 9 per cent year-on-year drop in commercial revenues reflected an advertising slump which worsened after the attacks on the US in September.

RTÉ said yesterday that it had paid no fee to have its programming broadcast on the Sky satellite network. The authority would decide soon whether to sell its transmission network. To date the sale process has cost €7.6 million, a sum which was written off in last year's accounts.