Taoiseach Brian Cowen has dismissed calls to safeguard dole payments and protect the unemployed from vicious Budget cuts.

The amount of people signing on fell by 3,000, to 422,500 last month and despite pleas from Labour leader Eamon Gilmore, the Taoiseach insisted the out-of-work will not be immune from swingeing savings.

Even though the Live Register was down for the first time in two years, the OECD think-tank warned the country now faced the risk of high long-term unemployment. And five weeks ahead of the Budget, Mr Cowen again warned no area of spending was sacred.

"The idea that we can deal with it by saying 'no' - there is over 35% of our current day to day spending, it will remain immune... That is not taking into account the seriousness and scale of the difficulties we face," the Taoiseach told the Dail.

The slight fall in the Live Register backed findings by state training agency Fas which claimed unemployment was rising at its slowest rate in two years.

Emigration, students starting university and people coming off the Register as they no longer qualify for benefits have all played a part in the fall, experts said.

While more than 160,000 people have been added to dole queues in the last year, the number of people on Fas schemes has doubled in the same time. The unemployment rate is now 12.5%.

Trade union group Congress said the Government cannot take comfort or credit from the slight fall.

Sally Anne Kinahan, Congress assistant general secretary, said the country was suffering more than the rest of Europe because not enough had been done to protect jobs. "To date, the scorecard reads Banks - 54 billion euro; Jobs - zero euro," she said.

Business lobby group Ibec warned it was too soon to say the economy has turned a corner. Chief economist David Croughan said: "It is vital that the government puts in place a stimulus package to retain current employment and stimulate job creation."