The Minister for Health Leo Varadkar has said he is not looking for "loads of extra money" for the health service for next year.

The Minister, for the first time, said that he was seeking a neutral budget which would “ hold health spending next year at what it is this year”.

The Department of Health is looking for the provision of supplementary funding of more than €500 million this year to deal with a financial deficit in the HSE.

It is understood that Mr Varadkar is seeking that this additional money should then be incorporated into the health budget for next year. In effect an additional €500 million would be given to the health service this year but that this would not be just a once-off allocation but would continue to be provided in the core health budget for next year.

In a confidential submission to the Department of Public Expenditure and Reform in August - and reported in The Irish Times earlier this month - the Department of Health said that in addition to the supplementary estimate of €500 million for this year being incorporated into base funding for next year, the health service would also need €500 million to €600 million in the years 2015 - 2017 to deal with demographic and other pressures.

However this position appears now to have shifted. Sources close to the Department of Health said last night if it received a neutral budget for next year, it could pay for additional services needed to meet demographic pressures from “savings and efficiencies”.

However sources said that if the Department of Health did not receive a neutral budget there would be a “downward spiral”.

The confidential Department of Health submission to the Department of Public Expenditure and Reform in August said that there was no capacity to safely operate services next year with less money than in 2014.

Mr Varadkar told the Dáil yesterday: “According to figures bandied about in the press, I am seeking either € 1.2 billion or € 900 million in additional funding for next year. I can state categorically that is not the case. I am seeking to achieve a neutral health budget to enable the Department to spend more or less that what was spent this year. I will try to provide a better service next year within the existing budget.”

The Minister said the HSE had recorded a net current deficit of € 260 million against profile at the end of September.

However he said that funding from the United Kingdom which was expected in November actually was received in September. He said that when this funding was excluded, a net current deficit of € 432 million emerged.

"Currently, it is anticipated that a supplementary estimate in excess of €500 million will be required to support services in 2014. This is based on costs to the end of July and takes account of the HSE's best estimate of likely expenditure to year end, mitigated by ongoing cost containment plans and income generation. It is important to stress that, as with any forecast, there is some degree of uncertainty, particularly given the scale of the overall HSE cost base, the complexity of the services and the lack of a national financial system. This forecast deficit excludes any overrun on the State Claims Agency, which relates to medical negligence payouts."