RTE is to seek several hundred job loses in preparation for major changes in the broadcasting environment. But the Department of Finance has already rejected a redundancy package which the station proposed to offer employees on the basis that it was too generous.

No formal proposal has been put to staff yet but some sources believe RTE will have to find 400 redundancies from a staff of almost 2,000. Job loses would probably be across the board, with a concentration in television programme areas reflecting the increasing amount of programme making going to independent producers outside RTE.

The biggest deal with an independent production company has just been agreed with Tyrone Productions - owned by Mr John McColgan and Ms Moya Doherty, of Riverdance fame - which has won the contract to fill the afternoon television slot. It is believed to be worth about £1.6 million.

The station organised seminars this week to introduce television staff to the factors that RTE believes will mean a crisis unless there is radical change.

These factors include the advent of TV3, the growth in multi-channel broadcasting with digital television, the decision not to index link the licence fee and the increasing amount of the programme budget that must go to independent productions under the terms of the 1993 Broadcasting Amendment Act.

Next year 20 per cent of the television budget has to be directed to independent production companies.

The seminars were described by one sources as part of a "softening up process". At one an analogy was drawn with the Titanic - with RTE in the role of the liner. The iceberg was in view. Whether RTE hit it or avoided it was the question facing staff and management, they were told.

The initial redundancy package devised by the station was rejected by the Department of Finance as being too expensive due to the inclusion of shift and overtime payments in calculating figures instead of just basic pay. The station is now preparing revised proposals.

RTE and the independent producers' organisation, Film Makers Ireland (FMI), have been at loggerheads over what constitutes 20 per cent of the programme budget. RTE maintains it is a maximum of £15 million but the FMI contends its members should receive £20 million. FMI has threatened litigation if a resolution is not found.

The Minister for Arts, Culture, the Gaeltacht and the Islands, Ms de Valera, told the Dail on Wednesday she was unwilling to review the workings of the Act in light of the employment consequences to RTE and while there was a threat of court action involving RTE and FMI. E and in the Dail by the former minister, Mr Michael D Higgins, the architect of the legislation. E and FMI, she said.

The effects of the 1993 legislation are already being felt. As part of this week's deal with Tyrone Productions, This week the biggest deal ever with an independent production company was agreed. Tyrone Productions, owned by Mr John McColgan and Ms Moya Doherty, of Riverdance fame, won the afternoon televisions slot. the company It will produce 130 hours of television between about 3 p.m. and 4.30 p.m. every weekday afternoon. It will presented by Marty Whelan and Mary Kennedy. It is believed to be worth about £1.6 million. As more of the schedule is produced outside RTE, an increasing number of contract employees will be let go.

Yesterday, Tyrone's head of television production, former Late Late Show producer, Mr John Masterson, said the programme would run from September until Easter. It would have a core production staff of 12, made up of those employed by Tyrone and freelances.

RTE had hoped that it could minimise the number of redundancies required if independent production companies used E's its facilities. However, this is not necessarily going to happen. E was simply too expensive and inflexible.

Tyrone Productions are is still talking to RTE and many in the independent production industry will be watching with interest to see if Tyrone decides to use RTE's inhouse facilities. The new breakfast television programme, due to start this summer, has been put off until autumn as no agreement on changes of work practices was reached with SIPTU members. The contract was won by Frontier Films.