Minister for Health Leo Varadkar has said the two-year budget deal his department has struck is designed to ensure it can adhere to spending limits without the need for repeated financial bailouts.

Speaking yesterday, Mr Varadkar said his department was “close” to signing off on an agreement for a two-year budget designed to end the cycle of overspending.

“It may not be possible to fix the health budget in just one budget,” he said.

“The key thing I want to achieve for health is a neutral budget and measures that will get us out of this cycle of overspending and supplementaries, and that may require an agreement over two years.

“ . . . Health is always a difficult area. A lot of health is demand-led. People have a legal entitlement to medicines being reimbursed and medical cards, so there are always going to be budgetary challenges.”

Asked whether the measures would help bring the department’s budget under control before 2016, he said the Government should be prepared to spend more on health should the need arise.

"What I want to have is a realistic budget that's possible to achieve, but we always have to be open to the possibility in health that things will come up," he said. "For example, in the unlikely event that we have Ebola coming to Ireland, we're not going to start cutting back on other areas of the health service to cater for that.

“So we always need to be ready in health to spend a little bit more to deal with health threats, but you want to at least go into the year in a position to break even, and I hope to be in that position.”

In relation to the Irish Times/Ipsos MRBI poll which found 44 per cent of citizens favour action in next week's budget to improve net incomes, while 21 per cent would opt for higher spending on services, he said the Government's challenge was to strike a balance.

“I think if you talked to the average punter they probably want a bit of both,” he said. “The challenge for Government is to manage those expectations.

“What I did note, which I think is significant, when people were asked in what area they wanted spending to increase, people favoured health above every other area combined, including education and social welfare.”