HUNDREDS of council staff were given a Christmas shock after being sent a demand for money.

They were told to cough up £371 each in National Insurance (NI) payments because the correct deductions had not been made from their wages.

However, bosses have advised staff to ignore the letters, blaming a computer glitch at the Inland Revenue (IR). They say the IR "erroneously rejected" the council's annual NI returns, and the correct NI payments had been made.

Mr Mike Owen, director of finance, has already sent an e-mail to staff but is now considering sending out a letter.

"It's the Revenue's fault," he said. "They're still processing our 2004/05 returns, and now they say they have lost our 2005/06 returns and want us to send it to them on paper. It's ironic, seeing as how they threatened to fine us if we didn't send it electronically!"

He added: "Staff have nothing to worry about. I'll be happy to e-mail again and put something in writing, perhaps on pay slips."