RTE is not automatically entitled to a licence fee increase, according to the Minister for the Arts, Ms de Valera. She told Opposition deputies that this was important in case there were "complaints about unacceptable State aids to RTE to the European Commission".

She said she would give careful consideration to RTE's application "within the framework of the Government's anti-inflation strategy". She pointed out, however, that she had not yet received a formal application from the broad caster.

"I cannot act unless I receive a submission," she told Mr Ulick Burke (FG, Galway East). He pointed to RTE's shortfall last year of £16.6 million and the likelihood of a £12 million deficit this year.

"The indications are that if this roll-over continues, there will be great pressure on RTE to reduce home-made programmes because it will not have the funding to continue to provide the service it has been providing heretofore."

Ms de Valera replied that "in order to consider that submission, I need to receive it. Once I receive the submission, I will consider proposals".

The issue had been raised by Ms Deirdre Clune (FG, Cork South Central) who called on the Minister to allow an index-linked fee increase. She pointed to RTE's annual report for 1999 and said it was obvious the national broadcaster could not function at its current level of remuneration.