Budget leaves Irish citizens paying for huge banking crisis

Cuts to child benefit alongside income tax reform will leave average families thousands of euro less well off while weekly payments to social welfare recipients will be slashed.

Taoiseach Brian Cowen will remain among the best-paid leaders in the world even after a 14,000 euro (11,800) pay cut and the Government was damned for refusing to increase taxes on the wealthiest of the country's citizens.

Finance Minister Brian Lenihan insisted that the Fianna Fail/Green coalition had recognised its past mistakes and was now putting the country on the road to recovery.

"This Budget is our first step in ensuring that we can get back firmly on our own feet," he said.

"It is a substantial down payment on the journey back to economic health.

"We can emerge from this dark time as a stronger and fitter economy to provide sustainable jobs and decent public services for all our citizens."

But the Opposition, trade union leaders, anti-poverty campaigners, children's rights organisations and others denounced the draconian package as an attack on the poor, middle income earners and the vulnerable.

The Government was also slammed over a lack of job creation and investment measures to kick to start the economy.

Three people were arrested as hundreds protested against the cutbacks outside the Dail in central Dublin.

Emergency sittings will attempt to fast-track the reforms through the Oireachtas (parliament) this week and into the early days of the new year.

The coalition will then face the wrath of voters with a general election expected in February or March.