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Just over a week ago, the cabinet decided to transfer NIS 1.1 billion to the Interior Ministry for the local authorities - NIS 600 million in "budget balancing grants", plus NIS 500 million for implementing recovery plans.

The anxious citizen, who has absorbed the harsh news that municipalities were not paying workers their legitimate wages, might be relieved to think that today, at last, the local authorities have a bit of cash in hand and can proudly raise their heads again.

Maybe this is how it would work out in Switzerland. It's not the way it is here, in a country where decisions declared usually bear no relation whatsoever to reality.

Not one agora has changed hands. The Finance Ministry's treasury division, headed by Uri Yogev and fully supported by his minister, Benjamin Netanyahu, doesn't seem at all fazed by the cabinet's decision. So they decided. So what? The treasury of course knows better where money should go, and to whom, and under what circumstances.

And so the budget division has decided, unilaterally and without consulting the Interior Ministry, not to transfer funds for the balancing grants to the regular budget lines. No, they will transfer the money to the ministry's budget reserves. Of course, not even that one agora can be taken from ministry reserves without the advance approval of the treasury.

So what if someone was appointed a minister of the interior? And who cares if he has a clear policy - to disburse the required grants according to approved criteria, without discrimination, and without giving in to pressure. But who is this minister of the interior when compared to the treasury budget director?

Behind this scandal there is a story. In the middle of last year, Minister Avraham Poraz realized his ministry was passing on NIS 66 million to the settlements each year under such miscellaneous titles as "security grants" or "Oslo grants".

Poraz decided to stem this infuriating flow of money, especially since his fellow ministers are flooding the settlements with money they don't deserve - Avigdor Lieberman via the Transport Ministry, Effi Eitam through the Housing Ministry, and Benny Elon in the Tourism Ministry.

Poraz was not willing to transfer funds in a way that did not follow official criteria. But the treasury objected to halting the flow of funds to the settlements in mid-year, and in the end the two sides reached a temporary agreement for the rest of 2003.

This year, Poraz was clear about not giving a single shekel to the settlements - but the treasury thinks differently - they want to force Poraz to transfer the money anyway, and because he refuses, the treasury is not passing on the local authorities grants, parking them instead in the reserves.

This is not Netanyahu's first attempt to take control of the Interior Ministry. Two weeks ago, during talks over additional budgets for the local authorities, the treasury made the surprise announcement that it would set up a committee - led by minister in Finance Ministry Meir Sheetrit, and including Uri Yogev. This panel would approve and handle recovery plans for the authorities.

This was a defacto coup against the interior minister, since if he is not allowed to make decisions regarding local authorities, what else can he do? Poraz kicked up a huge fuss and Netanyahu retreated. In the end a committee was set up, but Poraz heads it. Sheetrit is seeking other business for now.

On Wednesday Poraz sent Netanyahu a strident letter, demanding that he honor the cabinet edict for "the immediate transfer of the additional budget to the appropriate budget items, and not to the reserves." Netanyahu hasn't yet replied. He's too busy planning his next takeover bid.