The board promised to protect frontline services

The board ran up a deficit of about �5m in the last financial year and is predicting another multi-million pound shortfall in this one.

It said that the decision to suspend David Cargo was a "precautionary" measure which is not a "presumption of any guilt".

An "external and independent" review of the board's financial deficit has been launched.

Increased demands

In a statement, released on Friday, the BELB said the board became aware of the overspend in June.

It has been working since then to clarify the position and discuss a course of action to address the problem.

The board has an annual budget of about �200m.

The deficit for the last financial year should not exceed �5.4m, it said.

The statement said that the deficit was due to increased demands in special education, home to school transport, school deficits and job evaluation.

It said that the board had a legal obligation to meet the demands in these areas and is currently working closely with the Department of Education on a financial recovery plan to protect frontline services.

Cost-cutting measures

In addition to the review of its finances, the board has also launched an investigation into the wider implications of the overspend.

The Department of Education said it was appropriate for the board to place its chief executive on precautionary suspension pending the outcome of the review.

A statement from the department said it considered the board has acted appropriately to the gravity of the situation.

Meanwhile, SDLP members of the Belfast board have said they will not accept new cost-cutting measures brought in to help deal with the budget crisis.

SDLP councillor Pat Convey said the recovery plan "is not acceptable".

The South Eastern Education and Library Board, which has a budget of almost �220m, has also come under pressure over its deficit of �5.7m.

It had said it could only save about �1m without damaging the welfare of pupils.

However, it is understood to have now come up with a further list of cost-cutting measures which would save another �5m.