Peer Steinbrück, German finance minister, has admitted the problems of reforming the country`s overburdened healthcare system ``are still on the table``, in spite of claims by Angela Merkel, chancellor, that last week`s reorganisation would hold for decades.

Mr Steinbrück told the Financial Times that tax rises would be necessary as tax revenues gradually supplemented payroll contributions in the €140bn health financing system.

The minister admitted that political uncertainties in France and the UK were marring Berlin`s preparations to take over the European Union presidency in January. France faces a presidential election next year and the future of Tony Blair, British prime minister, is unclear.

Mr Steinbrück said the health reform package agreed by the governing coalition last week meant € 9bn in tax revenue would be needed by 2013 to finance medical costs. ``If anybody thinks this could be financed by just looking in my budget, he is making a mistake. This has to be refinanced,`` he said.

He also criticised Ms Merkel indirectly for her handling of the health package, adding to a damaging row that has broken out within the coalition over who was to blame for proposals, including health cost increases, that have been savaged by business and the public.

Mr Steinbrück is a leading figure in the Social Democrats, the coalition ally of Ms Merkel`s Christian Democrats. He said his party believed before the final health talks last weekend that it had a commitment from the CDU of substantial government cash to enable cuts in payroll contributions. In the end only €1.5bn a year will come from general tax revenues, with the rest funded from payroll taxes.

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