RTE has postponed the planned launch of its international station for the Irish community in Britain, citing straitened financial circumstances.

The national broadcaster wrote to Eamon Ryan, the communications minister, last month claiming that it would be “unwise” for it to continue with the plan.

John Nolan, chairman of the Celtic and Irish Cultural Society in Britain, said he was “shocked” by the move. “This is really disheartening, especially for the older generation,” he said. “The government has bragged about providing this service and it is long overdue, so there should be no excuses.”

Under the 2007 Broadcasting Act, the RTE Authority is required to set up a channel for “Irish communities outside the island of Ireland”, but there was no time limit imposed.

Five months ago Ryan said the channel would be available to the 850,000 Irish-born people living in Britain by St Patrick’s Day 2009 and would “provide the Irish abroad with a valuable link to home”.

RTE said it intended to honour the commitment in the legislation and hoped to launch the station by the end of 2009. Its initial plan was to have the channel on air by the end of this year.

The estimated cost of running RTE International is ¤3m a year. The main costs involve buying space on a UK transmission network and setting up a London base to assemble the programming for the channel. The government also wants the new station to expand into other countries with large Irish communities.

A spokeswoman for Ryan said the decision to postpone the launch of the channel was “a reflection of the financial realities in Ireland and worldwide”. She said the minister is committed to the idea of RTE International and that it could be a “brilliant product” similar to BBC World News.

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