The controversy over the re-hiring of retired police officers has hit confidence in the PSNI, Matt Baggott has conceded.

The chief constable said more had to be done to ensure former colleagues recruited as agency staff were subject to the same levels of accountability as serving officers.

He said claims some officers had walked straight back into their old jobs after receiving substantial retirement packages "did not feel good", but insisted such incidents were probably rare.

The region's top officer told members of the Policing Board that employing fixed contract agency staff was required to ensure effective policing was delivered in the face of the many threats, claiming that "sometimes unique times need unique measures".

Nationalists have expressed anger that the police spends £16 million a year employing agency workers, so-called "associate staff", many of whom are former officers. There are currently more than 300 ex-policemen and women working in the PSNI.

The police have faced criticism after claims some officers had returned to service shortly after retiring with a hefty financial settlement.

Concerns have also been raised that the ex-officers - more than 60 of whom work in intelligence - are not subject to the same oversight arrangements, such as Police Ombudsman, that apply to serving officers.

Facing questions from Sinn Fein's Gerry Kelly and the SDLP's Conall McDevitt at the monthly meeting of the board, Mr Baggott explained why agency staff were required. He claimed they provided better value for money for a service faced with a multimillion-pound shortfall in funding.

"I think we have to look at: is it necessary, is it legitimate, is it proportionate, is it practical?" he said. "And then you can combine the value for money arguments with the obligation to keep people safe and maybe we just need to come at this from a different direction than look at it in terms of the specific issue of associate staff.

"None of that takes away from the understanding we all have that here's an issue that is affecting public confidence, particularly in some communities and we need to explore how we can be open about that."