More than 300 British staff at the US embassy in London have started the new year working without pay because the embassy is broke.
The embassies are unable to pay for normal entertaining or social functions and staff are unable even to reclaim out-of-pocket expenses.
Angry disputes between President Bill Clinton and the Republican-dominated Congress in the US over the federal budget left 650 staff, including 380 Britons, at the embassy in London with little hope of a merry Christmas. They have not been paid since the first week of last month.
They are not alone: some 280,000 other US government employees have been temporarily laid off in a 19-day federal shutdown as the US budget wrangle rages. But because UK employment law does not allow for temporary lay- offs, British staff at the embassy in Grosvenor Square and at American consulates in Scotland and Belfast are having to work as normal.
The staff say that uncertainty over their pay has led to stress and low morale. At the end of this week they expect to be paid for the week before 15 December but not the week after.
If Congress is unable to agree a budget by 18 January they will not receive their next fortnightly cheque.
A US embassy spokesman in London confirmed that no one was being paid and that this could go on for some time: "The next cheque could come through in the next few days or it could be several weeks."
It is the embassy's second financial hardship in the last 12 months. Last summer the Inland Revenue demanded pounds 30m in back taxes.
The US Senate voted unanimously last night to end the shutdown, but hopes that the Bill would pass into law remained dim because of the unwillingness of the more zealous Republicans in the House of Representatives to give it their blessing.Reuse content