The battle at the Finance Ministry stepped up Wednesday as Finance Minister Avraham Hirchson overrode Accountant-General Yaron Zelekha, who has been at odds with the top brass at the treasury for months, over credit to cash-strapped local authorities.

The Finance Ministry said that Hirchson decided, under Article 34 of the government law, to take over the responsibilities of the accountant-general regarding credit to local authorities from Bank Otsar Hashilton Hamekomi, which lends money to local government.

Flanking his accountant-general, Hirchson approved the credit arrangements with Bank Otsar Hashilton Hamekomi, effective to March 31, 2008.

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Treasury sources said that the Finance Ministry has been looking into the problem of local authorities being refused more credit for the past two and a half years. The result is that certain local governments, such as Hatzor Haglilit, have broken down and are unable to pay wages.

Upon taking over as finance minister, Hirchson directed his director-general to reach an arrangement with Bank Otsar Hashilton Hamekomi, given the urgent need to pay the workers.

On November 27, 2006, the tenders committee at the treasury decided to exempt Bank Otsar Hashilton Hamekomi from the duty to compete through tender. That exemption required the confirmation of the accountant-general, who decided Tuesday not to ratify it.

As said, after studying the tenders committee's decision and Zelekha's response, Hirchson decided to bypass his accountant-general and approve the exemption.

Zelekha (a Netanyahu appointment) refused to approve the exemption because he wants first to cure the problems of the local governments, not just to continue to spend without supervision.

On Tuesday, in another sign of the nature of relations between Zelekha and the treasury officialdom, he told a conference of his unit that, "The many changes we have made in the work of the Accountant-general have shaken up the government's financial work, in a manner that startled terrific prehistoric beasts who for years had furtively sucked the lifeblood of the nation from their lairs."