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Prime Minister Benjamin Netanyahu has chastised the leadership of the Finance Ministry for failing to follow his instructions on the proposed state budget, sources close to Netanyahu say.

The prime minister also criticized some of his economic advisers for "falling asleep while on guard," one source said. The prime minister's reaction comes amid criticism of the proposed cuts in the 2009-10 budget proposal. Netanyahu has ordered the treasury to reevaluate the cuts, which are bound to hurt the poor most.

Last night Netanyahu met with the budget chief at the ministry, Ram Belinkov, and other top treasury officials. He ordered them to go over the budget again and remove all cuts that would harm the poor.

Sources at the Prime Minister's Bureau confirmed that Netanyahu had seen the budget before it was published and that he had authorized all the cuts proposed. His aides said Netanyahu had approved the cuts because he did not want to slow the progress of budget officials working under great time pressure.

It would be possible to later remove budget sections seen as problematic, the sources say.

"Netanyahu does not surrender to pressure," his office said in a statement. "This is the fifth or sixth budget that he is proposing, he knows the ritual of including elements in the budget in order to take them out later."

The sources stressed that the prime minister seeks a complete package deal with Histadrut labor federation chairman Ofer Eini, which may help resolve the crisis. According to a deal being put together, Eini will agree to wage cuts for 700,000 civil servants if Netanyahu agrees to increase the budget by 3 percent.

Still, the news of the cuts hit the prime minister hard yesterday, his first public relations crisis since he assumed office five weeks ago. Suddenly, the phrase "Netanyahu cuts" are making a comeback, six years since they first appeared and three years since the electoral debacle that lowered Likud to 12 seats in the Knesset.

Likud ministers and MKs awoke to a tough morning with supporters and party members ringing their cellphones nonstop. "Have you gone mad? What happened to you?" one caller wondered. "We're going to walk all over them again? The handicapped, the Holocaust survivors, the children the single mothers?"

By 8:30 A.M. the Prime Minister's Bureau had already contacted reporters with an announcement that the handicapped, elderly and Holocaust survivors would not lose out in the process. That was the first U-turn, a very fast one. According to Netanyahu's aides, the prime minister and "minister charged with economic strategy" had not known what the treasury had in store.

Netanyahu, his aides say, had given instructions that no harm should come to the poor. He assumed that his orders were being followed and only yesterday morning learned that the treasury officials had set him a trap.

"Finance officials," an aide said, "made cynical use of [budget] sections that they too recognize will never be implemented, only to stress how bad the situation really is. They made a grave mistake. Even if their motives were tactical, they should never target the weakest members of society."