New York Governor David Paterson has said he would take executive action to prevent the state running out of money before the end of the year.

Paterson said negotiations at the state assembly in the capital Albany had not solved the problem, forcing him to take emergency executive measures to plug a 3.2-billion-dollar hole in a budget devastated by reduced tax revenues.

"If the Legislature won't stand up for the people of New York because they're worried about the next election, then I will do so on my own," the Democratic New York governor said in a statement.

"That is why I am directing the division of budget to reduce payments to prevent our state from running out of cash this fiscal year."

Paterson did not specify how much money he intended to hold back from education, health and other public services.

Talks with legislators on a comprehensive budget reduction plan have been bogged down for weeks, although there were contradictory reports from the assembly, which is renowned for internal feuding, over whether negotiations were continuing.

Some reports suggested a deal was possible and that further debate was expected Tuesday.