REVELATIONS that social welfare fraud is endemic has confirmed the Government's worst fears and shattered public confidence in the system.

The Minister for Social Welfare, Proinsias De Rossa, is now presented with the dilemma of worming out the offenders who number many tens of thousands while defending his constituency.

This is a tricky one for politicians they cannot be seen to condone robbery of the public purse but, at the same time, they want to preserve a benign face to the electorate. They must assuage the anger of the taxpayer, who feels cheated by the latest revelations, yet avoid demonising the most needy in society.

Mr De Rossa must now rigorously police his department to ensure that welfare fraud is eliminated, while continuing to argue in Cabinet for increases in social welfare payments in the next Budget.

If he shows sufficient determination to root out the fraudsters and tighten up the system, he may be able to procure extra funding. On the other hand, the Department of Finance could hesitate at bankrolling, to any greater degree, a system that is costing the Exchequer several hundred million pounds each year.

Mr De Rossa's department is, in itself, in need of immediate rehabilitation, having hopelessly failed to protect taxpayers' money from abuse. Many politicians across the party divides are now asking how welfare fraud on this scale was allowed to continue for so long.

On the face of it, Fine Gael and Labour are rallying behind Mr De Rossa on the pragmatic basis that cohesiveness in government must be protected. However, the problem is viewed among the coalition partners as essentially Mr Dr Rossa's. He has built his reputation as a minister by insisting at the Cabinet table on a good deal for his constituents and he must now demonstrate a toughness in acting against those who indulge in fraud.

Mr Tommy Broughan, the Labour TD for Dublin North East, said pointedly yesterday at a meeting of the Dail Public Accounts Committee that he was disturbed by the major discrepancies between the report of the Central Statistics Office (CSO) and "what was told to us over the years that fraud in Social Welfare amounted to "about 0.45 per cent." It was a question which exercised more ban Mr Broughan.

Though Fianna Fail has played a distinctly low key role in this controversy, some in the party are taking some pleasure from Mr De Rossa's discomfort he is not their favourite politician. Rather than target the fraudsters, Fianna Fail has berated the Minister for informing the Dail only last June that the level of deception in the system was minuscule.

The party's Donegal TD, Dr Jim McDaid, issued a statement yesterday questioning the CSO survey and saying that if the Minister really believed the system was being defrauded by hundreds of million of pounds, he might consider some kind of amnesty "before sending in the sheriff and his posse".

"Unlike the tax amnesty, this exercise would be unlikely to benefit millionaire wheelers and dealers," declared Dr McDaid. "It should be designed especially to uncover the full time working dole collectors. We can really only guess at their numbers."

With the field wide open to him, the Progressive Democrats' spokesman on finance, Mr Michael McDowell, has ridden in with customary force, urging a range of radical measures, including the introduction of ID cards.

Meanwhile, there are sources in the Government who say that the Coalition should not have been so taken aback by the CSO's exposition. Some of them obviously smelt a rat way back.

"We knew a year ago that something was seriously amiss, when questions were raised over the serious diversions between the Live Register figures and the Labour Force Survey results," a senior source said.

THE Live Register records the number of people in receipt of unemployment benefit/assistance or signing on for credits. The Labour Force Survey is an annual survey conducted by the CSO of about 47,000 households throughout the country and carries a significant component about employment this has been revealing smaller numbers of unemployed people than those on the Live Register.

"Some of it could be explained away by the entitlement of part time workers to receive some social welfare benefits and married women signing on for credits. But this was not the full picture", the source added.

As a result of the dichotomy between the Live Register figures and the Labour Force Survey findings, the CSO was invited by the Department of the Taoiseach, in consultation with Finance and Social Welfare, to investigate the vast gulf in the estimates. The preliminary results, indicating that 16 per cent claiming social welfare benefit were in full time work and a further 28 per cent of claimants did not live at their "official" addresses, took everybody in Leinster House by surprise.