The Tanaiste has urged staff at the new Enterprise Ireland State agency to negotiate with management on a simplified grading structure. Speaking at the agency's official launch yesterday, Ms Harney reiterated there would be no "forced" redundancies as a result of the merger.

The coming together of the Irish Trade Board, Forbairt and parts of FAS has resulted in staff working on more than 40 different grades within the new organisation.

The Tanaiste also confirmed a severance agreement had been reached with Irish Trade Board chief executive, Mr Oliver Tattan. Ms Harney refused to disclose the cost to the State to meet its contractual obligations to Mr Tattan, citing issues of confidentiality while the package was being legally signed off, but stated that she would disclose the figure shortly. Mr Tattan may have received a cash payment and pension rights to the value of £150,000 from the State, sources believe. Enterprise Ireland chief executive, Mr Dan Flinter said the agency's board and management were now working to create a structure to deliver on the policy objectives laid down for the agency. Speculation about the introduction of a voluntary severance package was, he said, "premature". Commenting on the new agency structure, Labour Party spokesman on Enterprise, Trade and Employment, Mr Tommy Broughan, said the agency had started out "on the wrong foot" with staff already expressing discontent over the allocation of jobs. He called on the Tanaiste to "come clean" with her plans for the staffing arrangements at the new agency.

The new agency will employ up to 1,200 people.