The Civil Service was facing an "acute problem" retaining staff and this should be urgently addressed, the Minister for Finance said yesterday.

Mr McCreevy said officials at senior, middle-ranking and lower levels were leaving Government Departments to take positions in the private sector. Initiatives were needed to ensure that the Civil Service "holds its own in relation to attracting and retaining top-class people", he said.

After an address to the annual conference of the Institute of Personnel and Development, Mr McCreevy said there were still more jobs than applicants. But there was a concern, he said, that smaller numbers of people seeking entry-grade positions could lead to a shortage of candidates for top-level posts in 20 years' time.

While people were more likely to seek State positions in times of economic difficulty, the Minister said current recruitment policies would have to be strengthened and the loss of staff reversed.

"A lot of people are leaving the Civil Service, as there's a lot of choices out there," Mr McCreevy said. "That's something that will have to be looked at in terms of promoting our wares . . . Maybe we haven't been too good at it in the past."

Mr McCreevy argued that the Government's tax reform policy and the Programme for Prosperity and Fairness (PPF) would "facilitate recruitment and retention in the Civil Service".

But he continued: "It's become quite an acute problem to retain staff. Some of the most outstanding people in Ireland joined the Civil Service from a very early age. The ethos of having a great public service is something which has to be continued."

Measures such as "family-friendly" policies and "enhanced skills development" at all levels were crucial for all employers seeking to retain staff, Mr McCreevy said. Initiatives by the Civil Service Commission to attract staff would include these elements and focus on the commitment to equality and the scope for assignment within and across Departments.