The board admits that the development ?inevitably has a negative impact on its work elsewhere in the world?.

Twelve overseas posts have so far been cut and others are threatened.

The Church decided to invest in the Tiberias hotel project in 1999 as a potential revenue stream for its coffers. However, a combination of construction delays, which forced the cost of the development to rocket, and low occupancy rates due to the continued violence in the Middle East, has seen the project haemorrhage cash.

The Board of World Mission?s report states that, by the end of this year, the resort will cost the board ?550,000. This includes ?380,000 in unpaid interest on a loan made by the board to the resort, and ?175,000 in trading losses for this year alone, which the board is obliged to cover.

Now other areas of overseas aid provided by the Church of Scotland to some of the poorest parts of the world are being cut, and the Board of World Mission will tell this year?s General Assembly, which begins in Edinburgh on May 21, that other staff may also have to go.

The dozen overseas posts which have been cut include funding for HIV/Aids workers in Africa.

Convener of the Board of World Mission, the Rev Alan Greig, said: ?The Tiberias project has not even been opened for a full year, so we have to give it a chance.

?It was never intended that it would take funds away from the work of the board, but when the project started in 1999, it was impossible to predict events in the region.?

Greig refused to speculate on whether objectors to the project will protest at the continued draining of funds at the General Assembly.

?There will be a supplementary report detailing things like occupancy at the hotel published just before the assembly, and I couldn?t say if there will be any objections lodged to Tiberias.?

The Rev Iain Whyte lodged an objection to continued funding for the development at last year?s General Assembly, which was rejected after Greig asserted that ?the vision behind this project continues to be valid?.

Whyte said yesterday: ?The whole affair is a sorry mess, and deeply regrettable given the lack of funding now available for other projects.?

The Board of World Mission change its title to the World Mission Council in a few weeks as the Church of Scotland undergoes a restructuring exercise aimed at cutting costs.