First Minister Peter Robinson today warned against talking down the economy and again hit out at critics who claim there is a black hole in the Assembly's finances.

The DUP leader said the Executive would use the advice of a special think-tank of experts to fight the economic downturn.

But he told the Assembly today that the Executive had been "on the ball" in its handling of the economy and warned against talking-up a crisis.

This came as a leading economist claimed a tax increase in Northern Ireland will be necessary to maintain frontline public services.

With Chancellor Alistair Darling announcing his budget on Wednesday Northern Ireland faces the most challenging financial circumstances in decades, Bank of Ireland official Alan Bridle said.

"If the quality of frontline public services is to be maintained, then the reality will be some combination of reducing government costs, an increase in the regional tax burden and greater involvement for the private sector at a time when private finance is constrained too," he said.

Meanwhile, the Ulster Unionist Party deputy leader Danny Kennedy also warned that the Chancellor's planned efficiency savings could have a wider impact on Northern Ireland than the £140 million cut that has been predicted up to now.

"The Chancellor, Alistair Darling, has let it be known that he will be looking not only for £5 billion of efficiency savings in 2009/2010 but that he will also be looking for additional efficiency savings of £10 billion in the period beginning 2011-2012," said Mr Kennedy.

"This effectively trebles the efficiency savings already announced to £15 billion and has potentially serious consequences not only for Stormont but for all the devolved administrations."

He added: "If £5 billion efficiency savings resulted in Stormont losing £180 million to £200 million, then this latest news has the potential to lop £600 million off Stormont's bloc grant from Westminster over the three-year period of the comprehensive spending review.

"This will have a serious impact on the Finance Minister's budgets and it indicates that his position up to now of refusing to revise his budget and re-prioritise the Programme for Government is now completely unsustainable."

Mr Robinson told the Assembly the Cross Sector Advisory Forum would continue to offer critical advice on how to protect the economy.

On April 6 the forum, made-up of government ministers and representatives of the business sector, held its first meeting at Stormont.

And while Mr Robinson said politicians must be realistic about economic pressures, he added: "As the scale of the global economic challenge emerged, we did all that we could to ensure that we did not 'talk ourselves into a depression' by talking down the economy and dampening business confidence.

"Whilst always remaining realistic this is now the time to recognise that Northern Ireland will emerge from the current economic problems and get back to growth and prosperity."

He said the Assembly was not helpless in the face of the crisis.

In an attack on the UUP, he told the Assembly: "I don't know anybody who has an IQ that strays into double figures who would suggest that a Programme for Government which prioritises the economy should be changed.

"That clearly was the right decision that we took. It clearly is the right thing for us to continue with.

"The budget, like any budget with any government anywhere in the world, can be changed as times go on and pressures on the the one hand, or indeed under-spend on the other hand occurs.

"And of course that would happen."

But he added: "Of course there is no black hole. It is abundantly clear there is no black hole.

"What people who talk about a black hole are actually referring to is pressures and every government will face pressures.

"For instance we will have a very considerable pressure if the Chancellor was to take a decision on Wednesday that was going to impact on Northern Ireland to the extent that I have already outlined.

"But that doesn't mean there is a black hole, it means that we have to take decisions as to how we deal with that additional pressure."

The First Minister listed a series of measures he said the Executive had taken to deal with the economic crisis including freezing regional rates, deferring water charges, plans to phase out prescription charges, plus providing winter fuel payments, as well as measures to support the construction industry and boosting debt advisory services.

Mr Robinson added: "I think everybody knows that the Executive has been on the ball... I believe all of our ministers are striving within their own departments to make best use of the resources that are available to them in a context where they can assist with the economic downturn."