Fás, the troubled state jobs agency, is to be broken up, with mounting speculation that the government intends quietly to drop the agency's name and logo.

Seven hundred Fás staff, or over a third of the workforce, are due to transfer out of the agency and move to the Department of Social protection under minister Eamon Ó Cuív. It is understood these staff will no longer be on the Fás payroll.

The remaining 1,300 staff – part of the training arm of the agency – will transfer to what Tánaiste and education minister Mary Coughlan called a "new skills training agency" under the aegis of the Department of Education. However, it is unclear whether these 1,300 people will be employed by the department or whether the Fás name will be retained for them.

A spokesman for Siptu, which represents the majority of Fás staff, said that in all its dealing with the government over the restructuring of the agency, there have been repeated statements about a "new training agency' but no mention of 'Fás".

The union is seeking a meeting with the Tánaiste to clarify the uncertain future of Fás, which the union said is eroding staff morale already hit by financial scandals.

Last week, Labour TD and former finance minister Ruairí Quinn called for Fás to be shut down, with training funds redirected to academic institutions.

However, Siptu president Jack O'Connor strongly disagreed.

"The development of a sustainable economy requires a balanced skills set across a multiplicity of disciplines and occupations," O'Connor said.