The cathaoirleach of Limerick County Council, Cllr John Gallahue, said he has been informed by a senior council official that the cuts will be the "equivalent of the 50 full-time jobs."

Local authorities are also being asked to halve the money they spend on consultants advising on projects, other than infrastructure and housing programmes.

"The council need to do a value for money audit and look at people employed there who shouldn't have been employed in the first place. Layer after layer of bureaucracy will be stripped back. Costs ballooned in good times and now we're going to have to pare them back," said Cllr Gallahue.

Deputy county manager and head of finance at Limerick Council Council, Oliver Killeen, described the impending pay cuts as significant.

"A three per cent pay cut is a lot of money here and it's not going to be achieved without a lot of pain. Like every public authority in the country in 2009 there will be no easy options," said Mr Killeen.

However, he said the exact details of how their finances will be re-organised are still being examined, and added that factors such as overtime would be looked at before cutting jobs.

Tom Mackey, manager of Limerick City Council, said they are in the process of preparing the estimates, to present them to council on December 11. Mr Mackey could not say if cut of €800,000 for their authority will result in job losses, stating talks on restructuring are at an early stage.

"We are trying to ensure it will have as little an effect as possible on services and we're looking at how we can deliver the same service in an effective manner," said Mr Mackey.