The HSE is to recruit 1,000 newly graduated nurses on two-year contracts under which they will be paid 80% of existing starting salaries.

The new recruits will not be an additional resource, but will replace agency staff and are intended to reduce the dependence on overtime.

They will receive a starting salary of €22,000, compared to around €26,400 for graduates hired up to now.

However, sources said that they will still be able to boost their salary with overtime and other premium payments, though those additional payments will be calculated based on the new lower salary.

The HSE hopes the new scheme will secure savings of up to €10m a year.

It spent €80m this year on agency staff.

It is hoped the scheme will be implemented from February.