Protesters demonstrated against planned cuts in Argyll and Clyde

Trevor Jones made the claim while giving evidence to the Scottish Parliament's audit committee.

The board had not produced a plan to tackle the deficit - �35.4m in 2003 - while he was in the job.

Argyll and Clyde has insisted it can balance its books, but has called for assistance from the Scottish Executive.

Mr Jones, the former chief executive of NHS Scotland, left his post last year to take over as head of the Avon, Gloucestershire and Wiltshire Strategic Health Authority in England.

If you spend �35m more than you are allocated you need to employ fewer staff Trevor Jones Former chief executive of NHS Scotland

He told MSPs that although Argyll and Clyde was delivering financially in 2000, there were concerns this was being achieved through one-off funding.

When four senior board officials were replaced after a support group was set up in September 2002, it was made clear a plan was needed to prevent deficits reaching a level where it would be impossible to recover.

But Mr Jones told the committee: "I have never seen a financial recovery plan that would have Argyll and Clyde delivering its financial duties and living within the resources allocated by the Scottish Executive."

He added: "If you spend �35m more than you are allocated you need to employ fewer staff."

Argyll and Clyde has said it can balance the books year on year, but said it needed help from the health department to tackle the accumulated deficit.

In November, the board voted to close five hospitals for the elderly and mentally ill in an attempt to address its �100m deficit.