A GOVERNMENT body has been told it cannot replace 22 contract staff with 30 full-time workers, even though the change would not cost the taxpayer anything.

The Private Residential Tenancies Board applied to the Department of Finance for special permission to fill the jobs and promised the arrangement would be "cost- neutral".

The move might even have saved money as the eight new staff would have been able to do more work, reducing overtime costs and backlogs.

But the Department of Finance refused the request, saying it did not fall within the "very limited circumstances" where a ministerial exemption can be granted.

The bizarre loophole has been criticised by opposition TDs who called for an end to the recruitment freeze.

Fine Gael TD Leo Varadkar said: "It is a very strange decision and while the new staff would be on incremental scales and there would be pension obligations, you would at least be taking eight people off the dole. I think they have made the wrong decision.

"Quite simply, the recruitment embargo is not working. It can only ever work for a period of, at most, a year. Now it is getting messy: there are gaps in some areas where services are falling apart and then countless places where there are still too many staff."

The Private Residential Tenancies Board, which was established in 2004 and advises the government on the rental sector, said it was not in a position to comment.

"The number of staff, their grades etc are subject to the consent of the Minister for the Environment, Heritage and Local Government and the Minister for Finance," a statement said.