The Kirk closed four homes last year

The Kirk said it was inevitable that some services will close, with its 30 residential homes believed to be most at risk.

The church's board of social responsibility is to tell next months General Assembly that it may have spent all its reserves by 2004.

Board convener, the Reverend Jim Cowie, said: "Suddenly we're confronted with the situation where within two years we could have run out of our reserves and all of our work could be under threat.

"I think it is inevitable that some services will close."

Job fears

Over the past 13 years, �49.78m of the board's reserves have been used to keep its projects going and now just �8.8m is left.

The board states that if it does not take major action to reverse the drain on its resources it may not be financially viable by 2004.

The report also notes the fears of the board's 2,320 staff who do not know if they will have a job by this time next year.

And it warns that the 4,000 people who use the board's services on a daily basis don't know if they will still receive that service in the future.

According to the report, the most crucial decision faced by the board centres around the provision of residential services for older people.

The board will tell the Assembly that it is running at an unacceptable loss and that it can no longer sustain the same level of activity in this area Kirk report

The homes are being run at a loss and some may have to close.

The report notes: "The board reminds the Assembly that over the recent years it has been well informed about the issues of the care gap which arose because central and local government refused to properly fund the residential care of older people.

"After many years of debating, influencing and lobbying, the board finds an improved picture but not one that means it can carry on as it has - put bluntly, the board will tell the Assembly that it is running at an unacceptable loss and that it can no longer sustain the same level of activity in this area."

In a bid to balance the books, the board last year began a review of all its residential service for older people.

It describes the review as a "stock take" which will allow it to move forward to the next stage of analysing and implementing the findings.

The board will tell the Assembly that it is important this review is thorough "because decisions with far reaching consequences for people, communities and the church cannot be taken lightly."

But the board adds: "The risk of not making decisions is greater then the risk of making them."