The chief executive of the Welsh NHS says a £50m contingency fund has been set aside which could be used to balance the books.
David Sissling said he agreed with an assessment that the service faces the risk of a £70m deficit this financial year.
The Wales Audit Office has
that in a worst-case scenario the NHS could be £130m in the red by April 2013.
Mr Sissling was giving evidence to the Public Accounts Committee on 27 November.
The WAOs warning came days after Mr Sissling said he was
the local health boards would break even this year.
Mr Sissling qualified his response by saying he accepted that it was "a realistic and reasonable assessment of the scale of pressure in the NHS" and that it was necessary for the NHS "to respond".
"We always knew this year there would be pressure in the system.
"Part of our role in looking at that pressure and in a sense the risk associated with the pressure is to ensure we've got strategies and plans to allow that risk to be managed, to make sure that if necessary we can provide the right kind of intervention and support and ensure that there will be a break-even and appropriate year-end position."
A contingency fund of 1% - worth around £50m - has been set aside, he told AMs for "unforseen circumstances".
Kevin Flynn, Mr Sissling's deputy said that much of the extra NHS demand is due to inward migration to Wales of people over 45 years old in all areas except Cardiff.
Also giving evidence to the committee will be the Director of the Welsh NHS Confederation Helen Birtwhistle.
She said that there had been a great change in the NHS since she last gave evidence to the committee in February, that the NHS now "knows what it has to do".
"Money is money and the NHS knows it has to work within that framework to break even."
She agreed with Aneurin Bevan Health Board's Director of Finance and Procurement Alan Brace that the government was not being helpful.
Committee chair Darren Millar AM, had suggested that by saying there was a contingency fund available, yet demanding that the health boards break even the government was sending out "mixed messages".
"I think it's clear from the figures in front of us today and the evidence that's just been given that the health boards understand that this isn't a walk in the park," said Ms Birtwhistle.
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