A former Chairman of the Central Remedial Clinic (CRC) has said the centre has not misused public funds and the HSE had been aware of privately-funded top-up payments.

Des Peelo said the HSE informed it that it could no longer fund the additional payments out of the annual allocation it gave to the CRC to run services for peoploe with disabilities.

He said senior HSE executives were made fully aware at a face-to-face meeting four years ago that the CRC would use its own charity funds to pay top-ups to its managers.

Mr Peelo told RTE that Mr Peelo said that he, as Chairman, and a fellow board member met with five HSE representatives in June 2009, including 'two of the very top people' in the HSE.

He said the HSE informed it that it could no longer fund additional payments out of the annual allocation it gave to the CRC to run services.

"We had this meeting, a very amicable meeting, it took less than an hour to agree all of this and what happened at that meeting was that it was agreed that the salary levels would continue because we had contractual obligations."

Mr Peelo said the CRC could not unilaterally reduce the salaries concerned as it could have been sued under employment law.

In a statement yesterday, the CRC confirmed it was agreed in 2009 that when the positions receiving top-ups became available through retirement or vacancy, new staff would be engaged on salaries purely in line with the Department's pay scales.

In the meantime, it was agreed that the difference between the Department of Health pay scales and the contractually obligated salaries of these staff would be funded through lottery proceeds received by its fundraising arm, the Friends of the CRC.

Mr Peelo rejected calls for the board of the CRC to resign. "No one has done anything wrong," he said.