The union of Students in Ireland (USI) is going through a cash-flow crisis which has stalled reform of the organisation and will delay the return of disaffiliated unions.

Having already closed Club USI and downgraded two full-time officer positions to part-time voluntary ones, the union is now considering selling a part of its 50 per cent stake in student travel company, USIT, in order to enable USIT International to float on the stock market. USI is also to give up the lease on its Aston Quay, Dublin, headquarters, which are owned by USIT.

After the closure of Club USI, the union's landlords offered USI the opportunity to buy the building, but the union has decided to purchase alternative headquarters. The president of the union, Dermot Lohan, says USI is "in a transition period financially" and cannot appoint a research officer - as it was mandated to do at last year's annual conference - because of its cash-flow problems.

"It's hard to make a long-term commitment to staff when your whole financial world is changing around you. I would have been one of the people last year who were pushing for USI's resources to be spent on staff, particularly the research officers, but USI are at a crossroads at the moment, especially in regard to arrangements we are coming to with USIT who have been one of our main financial sources over the years.

"Nevertheless, there's a commitment from USI to hire the staff and we will. We just have to get our cash flow and budgets and everything sorted out before we can do that."

Lohan says he is reluctant to comment on rumours that USIT was to float on the stock market as it is "a matter for the USIT board". However asked what USI's position would be on the matter, he says: "If we can make money, we'll make money - that's why we have the shareholding.

"As directors of USIT we have to act in the best interest of the company and in good faith." Lohan rejects claims that the flotation would not be in the best interest of students. "USIT will always be competitive and we'll always have a significant shareholding within it." The USI president defends the union's decision to cease the operation of Club USI, including its Furnace nightclub, which shared a building with union headquarters in Aston Quay.

"Club USI wasn't making money, so it would be wrong for USI to continue to run it. That would be financially disastrous, especially as running nightclubs isn't part of our core business."

"Student unions weren't booking the Furnace for their events because the competition in Dublin is massive with so many clubs launching, so I don't think the unions are going to miss us. We weren't in the ha'penny place compared to places like Boomerang, the Temple Theatre and the POD."

While welcoming USI's continuing withdrawal from its business activities, UCD students' union will not consider rejoining USI until reforms passed at last year's congress are implemented. UCD's reaffiliation is of considerable importance to the national students' union: it is the country's largest university and contributed more than £30,000 a year in affiliation funds before its students voted by a narrow margin to disaffiliate from USI last year.

However, UCDSU's president, John Nesbit, welcomes reports of USIT's flotation, saying it would provide "much needed revenue for USIT and the union.

"USIT knows where its bread and butter is coming from, and knows it has to be as student-friendly as possible, no matter who has a majority shareholding. If USI were to have a problem with the way USIT was running things after the flotation, it would just be a matter of suggesting USIT is not the best place for students to go for their travel arrangements."

A development which could further compromise the finances and lobbying power of USI is the news that Dublin City University's student union is to hold a referendum after Christmas on its membership of the national union. DCU has already joined the rival Federation of University Student Unions (FUSU), while remaining a member of USI for the moment.

DCU students' union president, Dave Flynn, says he is a supporter of USI, but feels it would be healthy for his students to have a say in whether they are members of the national union. "Through FUSU we exchange information in a way that we couldn't really do in USI - because Galway is the only other university still in it. For anyone to see FUSU as a threat to USI is narrow-minded."

Meanwhile, Lohan says he does not know when USI will receive the report on the inquiry it set up last term into officer expense procedures in USI.

"A committee of three people was set up by USI national council. When they're finished their work then we'll get the report. All of them have professional jobs and they're doing it in their spare time. When it's finished, USI will get it and bring it to national council. Pressed as to when he expected to receive the report, Lohan replies: "Soon - a month, maybe six weeks. I'm not too sure because the committee are autonomous so it's not up to me to crack the whip."

Lohan says the report is "as valid today as it was when we first asked for it at congress. People have questions they want answered. It's the students' money and it should be accountable."