Drugs for breast cancer patients will not be affected by the cuts

The Health and Social Services Department said it has seen a reduction in real terms of �3.5m in its funding this year.

Inflation in the cost of providing healthcare is running at about 8%.

If the trend continues, it is feared the service could be under-funded by up to 24% by 2008, in relation to that of neighbouring countries.

The States department said it was tackling the issue by prioritising certain areas of health promotion with the hope that prevention is cheaper than cure.

Last month, breast cancer patients were assured that budget cuts would not affect their treatment and life-saving drugs would remain a top priority.

The average cost of providing a drug such as Herceptin is about �25,000 a year per patient. Five local women are currently being treated with the drug.