Reports that the Northern Ireland Executive is underspending its budget by up to �1m a day have been condemned as an absolute disgrace by an assembly member.

The chairman of the assembly's finance committee, Francie Molloy, said there was a danger the executive could have its budget reduced in the future.

A report addressing the issue is due to be released by the Finance Minister, Sean Farren, in the autumn.

Speaking on BBC Radio Ulster Mr Molloy said it was a case of mismanagement by the executive.

The minister has been allocating money to departments that do not have clear plans of how they are going to use that

Francie Molloy Assembly member

"I think it is the issue of departments bidding for more than they can actually spend.

"Instead of the minster, Sean Farren, dealing with the issue of priority needs, which are health, education and infrastructure, he has been allocating money to departments that do not have clear plans of how they are going to use that."

The disclosure has angered health and education professionals.

However, the reports have been played down by the Minister for Regional Development, Peter Robinson.

Mr Robinson said underspending was not unusual.

"There is never any difficulty with departments in Northern Ireland spending the money," he said.

Peter Robinson: "Underspending not unusual"

"What is important is that you have a programme of government that is capable of making the best use of it.

"Undoubtedly from time to time there will be programmes that for various reasons, that had been hoped to start but cannot they start because statutory procedures or other delays take place."

One ministerial source blamed inefficiency by officials and expressed fear that the Treasury in London would note the underspending and prove less generous to Northern Ireland in future spending reviews.

On Thursday, the executive discussed the funding of specific projects from the package announced by Chancellor Gordon Brown and Tony Blair when they visited Belfast in May.

One project certain to receive funding is the new cancer centre in Belfast.

The details will be announced next week, but it is believed the health sector will receive about �110m from the initial tranche of what is known as the Reinvestment and Reform initiative.

Local politicians frequently ask for more money to address the many problems in Northern Ireland, so the revelation is expected to cause significant embarrassment.