The country's national theatre has been given the go-ahead to outsource the construction of its sets abroad – a move which will result in the loss of 11 Irish-based jobs.

In a ruling published last week, the Labour Court accepted that management of the Abbey Theatre "has no alternative in the current financial circumstances but to take whatever steps are necessary to reduce its costs".

This means that the workshop where sets are currently constructed will be closed.

The Abbey argued that it will receive €2.5m less in 2010 from the Arts Council and had been told by the Department of Arts that it was "on its own" and will have to live within its means.

The theatre said it would save €600,000 by closing the workshop, which employs 11 people, members of Siptu and the builders' union Batu.

A spokesman for the Abbey said claims by the unions and Fianna Fáil deputy Noel Ahern that the set-construction work was being outsourced to the UK were not true.

He said the construction of each set would be put out to public tender under the government's procurement guidelines.

But Siptu official Des Courtney said it was widely expected that set construction for the national theatre would go to companies based in the UK.

Last month, Fianna Fáil deputy Noel Ahern asked the then arts minister Martin Cullen how the theatre was being allowed to consider transferring such work to the UK.

The cut, if agreed, will apply to the new one-man show Outcasts by economist David McWilliams, which opens in the Peacock on 16 June.

The stand-up show by McWilliams ironically in­cludes a discussion on the way the country has handled the move from boom to bust.