A CASH strapped North-East police force warned last night that it would have to slash recruitment and may have to make staff redundant in order to avoid financial disaster.

Every police and civilian worker at Cleveland Police has been issued with a statement detailing the force's dire financial plight.

Officials have already had to grapple with a £7.3m "black hole" in the force accounts that came to light earlier this year.

And last night they admitted the financial headache had not gone away because they have to find the cash to pay the pensions of record numbers of officers who are retiring.

Chief Constable Sean Price said: "As Cleveland Police was established in 1974 an unusual number of officers will retire after serving their 30 years this year.

"The problem is exacerbated by a decision made in 1964 not to establish a pension investment fund."

The Government has approved an extra £2.5m to help the force in the next financial year.

But even with that extra money, the force is still looking at a total shortfall of between £5m and £7m.

And the financial headache is expected to continue.

The force pensions bill is projected to increase by £1.9m in 2006 and £1.5m in 2007.

In a letter, the force said that it was hoped some civilian staff would take early retirement or voluntary redundancy.

However, Mr Price said compulsory redundancies could not be ruled out for civilian staff.

Police officers will not be made redundant but the intake of new PCs will be reduced.

Cleveland Police were criticised for a "spend, spend, spend" culture in an Audit Commission report earlier this year.

The commission was investigating the £7.3m deficit which came to light in February.

Mr Price said: "We realise this will be an anxious time for staff and that is why we have set up extensive avenues of consultation and communication to keep them informed.

"We will keep staff fully informed. It must be stressed that the impact of any changes is unclear at the moment."

A project group has been set up to examine all police service functions and structures and recommend how savings can be made.

Mr Price has pledged no reduction in front-line policing. Ironically, he said the shake-up could see numbers on the street increase as the proposed civilianisation of some roles will see desk-bound officers return to the beat.

Civilian staff working hours will be cut for some and other posts will be amalgamated, reduced in size or removed.

Police Authority chairman Ted Cox said: "We have made clear to the Government that we have taken the necessary measures to deal with the potential financial shortfall we were facing earlier this year.

"This is something entirely different and, to a very large degree, relates to the growing burden of pension costs."

An anonymous police officer, who contacted The Northern Echo yesterday, said: "Everyone's wondering what's going to happen next. It could still be that police officers jobs will go or important services. It's just a bad situation."