THE government is facing a major battle to implement its radical healthcare reforms announced last week, with hospital consultants expected to seek salary hikes and compensation running into hundreds of thousands of euro each if the proposals are implemented.

Hospital consultants will be required to work a far more flexible roster over a 24 hour period and to relinquish some private practice rights under the terms of the reform package.

Some public sector union sources suggested that the consultants' pay demands to compensatate for the greater flexibility and the loss of often-lucrative private practice could see them seeking salaries of up to ?500,000per annum.

The Irish Hospital Consultants' Association (IHCA) said that it would be discussing its response to the government.

The Irish Medical Organisation (IMO) said that it will not accept any new consultants contract which imposes any restrictions on private practice.

The IMO is also likely to seek to protect the substantial overtime earnings received by non-consultant doctors, even though their hours are to be reduced, a move which could make a new deal next to impossible.

The other health unions have said that the bulk of the change proposed in the health reforms are not covered in the modernisation programme of Sustaining Progress.

While they said it was too early to talk of pay for change deals, if there were any changes above and beyond that agreed under modernisation, they would have to be the "subject of discussions".

Meanwhile there will be little or no money in the 2004 estimates for the implementation of the controversial Hanly report reforms announced last week.

Around half of the government's additional spending for next year will go towards meeting public sector pay increases of ?1bn.

Ministers attending a special cabinet meeting at Government Buildings yesterday were told that day-to-day spending could increase by around ?2.2bn next year ? an increase of close to 7% on last year.

However, the bill for public sector pay increases along with likely spending increases in health and social welfare is set to exceed ?2bn, leaving little, if any, increases for other government departments.

The Department of Finance is understood to be insisting on limiting health spending increases to around ?650m next year, to include the ?200m cost of paying benchmarking to all 100,000 staff. Health had sought rises of around ?900m.

A ?650m rise would in effect lead to further health cutbacks next year. The Sunday Tribune revealed last week that there is unlikely to any further progress made next year on providing additional hospital beds or medical cards as set out under the Health Strategy.

Social welfare spending ? which will be dealt with in the budget rather than the estimates process ? is certain to increase by a minimum of ?400m and more likely by around ?600m or 6%.

There is widespread acceptance among ministers that social welfare increases of this magnitude are required as a minimum.

Finance minister Charlie McCreevy now faces a choice on whether to increase taxes, raise borrowing or cut spending in other areas in drawing up the books for the December budget.