Pressure is mounting on Foreign Affairs and Trade chief executive John Allen as the Government orders him to scale back his controversial cost-cutting proposals.
Foreign Affairs Minister Murray McCully yesterday wrote to Mr Allen telling him to revise his plans to slash $25 million.
Almost 136 locally employed overseas staff are likely to keep their jobs as a proposal to outsource jobs to contractors is dumped.
Allowances to overseas staff will remain and salary cuts are unlikely. The burden will now fall on heads of mission – especially those in Europe – to make savings.
Senior diplomats will be asked to return to Wellington next month – at a cost of $200,000 – and told to take more responsibility for their budgets.
In the letter Mr McCully said outposts in China, South-East Asia, India and the Middle East should keep their staff and their allocations.
But he has the $64m cost of running European missions in his sights and says $12m of savings "should be achievable". As well as closing Stockholm and Warsaw, Mr McCully wants "significant downsizing or closure" in The Hague, Rome and Madrid.
He also took a swipe at the ministry over its failure to cut back office costs "that are seriously excessive".
Mr McCully wants to establish an external board to manage Mfat's property portfolio and wants a move to cheaper offices in Paris.
However, 600 workers will still have to reapply for their jobs.
In the letter Mr McCully offered his support to Mr Allen.
But Labour foreign affairs spokesman Phil Goff believes Mr McCully is trying to make Mr Allen a scapegoat.
Quizzing Mr McCully in Parliament yesterday he said: "Is the minister now telling the House that it is all Mr Allen's fault, and that, in fact, Mr Allen did not consult with him closely at every step of the way?"
Mr McCully replied: "I have made it very clear that the proposal circulated to ministry staff comes from ministry management, and not from me."
Mr Goff maintains the Government wants to slash $40m from Mfat's budget by 2014, which Mr McCully denies.
Mr Allen declined to comment last night. A spokeswoman said the ministry has been "in discussions with Government throughout the process and they have provided clear direction on their priorities and expectations".
Consultation with staff on the proposals is drawing to a close and "final decisions will only be made after all feedback has been fully considered".
The saga has been marked by leaking of cables showing senior diplomats' concerns.
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