Dublin's Catholic archdiocese is close to a ‘state of financial collapse’ according to a leaked consultation document from its Council of Priests, details of which are printed in today's Irish Catholic newspaper.

The document says many parishes are in a precarious financial position, close even to a state of financial collapse.

The document blames decreasing levels of collections due to the economic downturn and declining participation at mass. It also cites the ongoing cost of compensatory settlements made to victims of clerical abuse.

This, the document says, has led to reserves the diocese has built up over decades being spent.

It suggests that all central administration posts must be assessed and pay cuts in line with public service pay reductions must be considered by diocesan agencies and parish workers.

The document proposes the possibility of a parish based levy on Catholic families in the parish, which could raise up to €3m a year.

A spokeswoman for the archdiocese confirmed the existence of the document, saying it was aimed at addressing the economic realities facing the archdiocese.

She said to make no changes would have serious financial consequences.

It is understood that members of the Council of Priests, which advises the archdiocese, have been asked to consider the document, speak with priests at parish level and report back on their findings and proposals to a meeting in September.

Already, diocesan staff have seen a significant reduction in their pension provisions and have had their pay frozen over the past three years.

Priests’ salaries, which are tied to collections, have also reduced by 6%.