Management at RTÉ have revealed the station is running a €13.5 million deficit, and cost cutting and better advertising revenue in the second half of 2003 would be needed to prevent the station slipping into the red once again.

In a sometimes ill-tempered meeting with the Joint Oireachtas Committee on Communications, outgoing director-general Mr Bob Collins promised the station would produce a surplus of more than €3 million for the year despite a fall-off in advertising in the first six months.

The station's chief financial officer, Mr Conor Hayes, said the station would produce income for the year of €312.8 million based on reasonable assumptions on advertising and other commercial revenue.

However, he told the meeting the one "caveat" was An Post's ability to collect €159.1 million of licence fee income for 2003.

The committee wanted to know how the station was going to tackle the deficit in the second half of the year.

Mr Hayes said cost cutting across the whole station would have to take place but there were no "big ticket items" to be removed from the balance sheet. He said adjustments would be made in several areas and this would produce cost savings of more than €13 million.

He said changes made last year to work practices would also kick in this year. Incoming director-general Mr Cathal Goan said the company no longer had to pay for costly outside broadcasting units on a permanent basis. Instead, they were outsourced and used when needed.

Earlier, the chairman of the committee, Mr Noel O'Flynn, had harsh words for the station about its financial performance.

"Despite a large licence fee increase, there appears to be the potential for the financial crisis to continue in RTÉ," he said. "In my view, the taxpayer cannot be expected to sustain a loss-making public broadcaster in the fashion in which it appears RTÉ has become accustomed."

Mr Collins said there was an assumption in some newspapers that, just because the station was running deficits during the year, the outcome would be a deficit for the whole year. "The reason we have financial problems is not because we are some kind of crockety operation that needs some kind of public support."

He pointed to the worldwide slowdown in advertising and assured members that, despite this, a surplus would be produced for 2003.

After listening to the station's presentation, Mr O'Flynn said: "I am greatly relieved I must say."

During the meeting, there was some discussion about RTÉ staff doing outside work and whether this might create conflicts of interest.

The director of news, Mr Ed Mulhall, said the station was revising its code of conduct in this area and changes would be made if needed.