Minister for Finance Michael Noonan has said there was some flexibility around the planned €3.1 billion of cuts due in next month's Budget.

Some ministers want to use the slack afforded by a bank debt deal struck with the European Central Bank earlier this year to bring in a less stringent Budget.

But the European Central Bank, International Monetary Fund and Central Bank would prefer the money to be held as a cushion for the economy in case of shocks.

"We don't want to impose any hardship that isn't necessary. The Europeans are very insistent that we meet the targets but there is a little bit of flexibility and we will work in that space to bring forward the best budget possible," Mr Noonan said.

Speaking on his way into a Cabinet meeting, Minister Noonan said he did not expect Budget targets to be set today.

He said that preliminary meetings were under way and work was proceeding satisfactorily.