Faced with the difficult task of balancing a budget in austere times, officials in New York's Suffolk County said on Friday they had no choice: they had to sack Santa Claus.

The county executive said he could not justify carving out $660 from his $2.7 billion budget to pay David McKell, 83, a World War II veteran and former homicide detective, to don his Santa suit for the tenth year running and greet children on Long Island.

"How do you justify that expenditure when a health centre is losing money?" Steve Levy, the Suffolk County Executive, said in an interview.

He said that some 750 county employees were facing layoffs as a result of budget restraints, including what he described as a $20 million cut in state aid to the county's health system.

"Let either the private sector come forward with a donation, or, better yet, let's tap the volunteers in the community," he said.

Levy was quickly called a Grinch by his opponents.

"Do we really have to hold Santa Claus hostage to balance the budget?" said Bill Lindsay, a Democrat and the presiding officer of the county legislature.

"I mean, $600? Give me a break," Joseph Sawicki, a Republican who as county comptroller is charged with overseeing the county government's fiscal prudence, said in an interview. "There comes a point where you go overboard in terms of penny-pinching."

County officials said dozens of people had come forward offering to pay for Santa's services and Levy himself volunteered to don a Santa suit for a shift or two.

In the end, Steve Bellone, the current town supervisor of nearby Babylon, who is running as the Democratic candidate to succeed Levy, said he would pay for Santa.

Levy, who is not running for reelection, dismissed Bellone's gesture as "pure grandstanding", and said his office was investigating whether the check breached rules governing gifts to county agencies.

McKell, the Santa at the centre of the storm, said Bellone's check -- part of which would cover gas and other Santa expenses -- had resolved the matter.

"I wish him (Levy)a very merry Christmas and a happy new year," McKell said.