Penniless New Orleans Fires 3,000

With their lives thrown into turmoil by Hurricane Katrina, the news has got worse for 3,000 New Orleans employees, who were fired after the city's government said it was no longer able to pay them.

The job losses are a further blow to a city struggling since the hurricane five weeks ago. The mayor, Ray Nagin, who announced the cuts on Tuesday, warned that there could be more losses to come: "I wish I didn't have to do this; I wish we had the money, the resources to keep these people. We have no revenue stream and the prospect of getting revenue ... is pretty dicey."

Mr Nagin said cutting the workforce would save up to $8m (£4.5m) of the city's $20m monthly payroll. No police officers, firefighters, or emergency medical workers would be fired, the mayor said, but "non-essential" support workers in those departments would lose their jobs.

Asked if it was difficult to tell people -many of whom have also probably lost their homes - that they no longer had jobs, Mr Nagin said: "It's really tough."

Many fear the job cuts will further delay the city's revival, and are asking why the federal government has not bailed out the city. "We've had Hurricane Katrina, Hurricane Rita and now Hurricane Layoffs," Oliver Thomas, the city council president, told the Washington Post. "When will some relief come for the people of this region? We're dying down here."

There was some good news, however, with the number of dead proving substantially lower than feared. In Louisiana, the door-to-door search for bodies has ended, and the death toll stands at 972, while the number in neighbouring Mississippi stands at 221. In the days after the storm Mr Nagin estimated the death toll in New Orleans alone could reach 10,000.

Meanwhile, more than 40,000 left homeless will remain in hotel rooms beyond yesterday's deadline set for their relocation, after the failure of efforts to rehouse evacuees in mobile homes, cruise ships or flats. The hotels, costing an estimated $8.3m a day, were supposed to be a temporary measure.