HEALTH minister Mary Harney has publicly acknowledged that the stalled co-location initiative, which was first announced in 2005, will have to "deal with" a new funding situation which has "changed significantly" in the last number of months.

In a recent written Dáil reply to a series of parliamentary questions from Fine Gael and Labour, she also noted efforts by the HSE to help successful bidders to advance their projects are continuing.

The comments by Harney come amid ongoing question marks about the ability of co-location developers to raise the necessary finance in the current economic climate, and follow fresh claims that the cost of health insurance is set to rise by 25% due to the changes which the controversial initiative will bring about.

"It is a matter for each successful bidder to arrange its finance under the terms of the relevant project agreement. It is certainly the case that the funding environment has changed significantly in the last number of months and this has affected both the public and private sectors," Harney told the Dáil in her recent written reply.