Seasonally-adjusted unemployment fell by 4,000 in June to 197,700. This is the largest drop in unemployment for two years and brings the standardised unemployment rate down to 6.6 per cent, compared with an EU average of over 9 per cent.

However, before adjusting the figures for seasonal factors, the number of people actually signing on the Live Register rose by 4,085 last month. The number of women signing on rose by 4,289. There was also an increase of 1,826 in the number of under-25s on the Live Register.

The huge increase in women on the Live Register reflects the end of the school year. The vast majority of temporary teachers, cleaners and catering staff employed in schools are women. The school holidays probably account also for the increase in the number of under-25s signing on. However, the June increase this year was not as sharp as usual, leading to the seasonally-adjusted fall.

The Labour Party spokesman on Enterprise, Trade and Employment, Mr Pat Rabbitte, accused the Government of not doing enough to protect the rights of atypical workers affected by seasonal factors. He said: "This scaling down means that affected workers are excluded from availing of some security benefits, which are based on the continuous accumulation off stamps over a certain period of time.

"Now that we are beginning to turn the corner on our unemployment problem, it is time to ensure that the workplace provides security of income for all workers." Protective legislation for workers "has remained at the tail-end of this Government's agenda", he said.

The labour market co-ordinator of the Irish National Organisation of the Unemployed, Ms Carole Sullivan, said the increase in young people signing on was particularly worrying, as the Employment Action Plan had been targeted at this age group since September 1998. Monthly progress reports had concentrated on the numbers leaving the Live Register, "but tell us little about what happens to them once they leave".

"The whole purpose of the plan is to get people into jobs, but the reports fail to tell us anything about the nature, wage level or duration of the jobs people moved into. If they went into training, they also fail to tell us anything about the nature or quality of that training."

"Could the numbers of young people now signing on this month be the same people who signed off as a result of the action plan?" A qualitative evaluation was needed to determine whether young people were "merely being recycled through short-term, insecure jobs and training programmes".

The Minister for Social, Community and Family Affairs, Mr Ahern, defended the Employment Action Plan and said that, since its introduction last September, "the numbers under age 25 on the register have fallen progressively". He also defended employment policy, stating there were 57,000 fewer people on the Live Register than there were when the Government came into office two years ago. The emphasis was on training and education to assist people "become job-ready".