* Mini-budget to be tabled in early April
* Govt signals income taxes to be raised
* Sticking to budget deficit goal of 9.5 pct of GDP
* Numbers claiming social welfare rise at record pace
(Adds planned job cuts at Bausch & Lomb, minister comment)
By Carmel Crimmins and Jonathan Saul
DUBLIN, March 4 (Reuters) - Ireland vowed on Wednesday to show foreign investors it had a handle on buckling public finances after data showed the country's unemployment rate hitting a near 12-year high in February.
Under pressure to salvage its goal of a fiscal shortfall of 9.5 percent of gross domestic product this year, already the highest in the euro zone, Dublin has said it will unveil an emergency budget in the first week of April.
"We have to show the wider world there is a path out of our financial difficulties and I believe we can do that," Finance Minister Brian Lenihan said.
"The idea that we can borrow endlessly to stimulate economic growth is not correct."
Tax revenues fell by nearly a quarter in Jan-Feb from a year ago as the former "Celtic Tiger" economy slid into its worst recession on record and Lenihan said shrinking revenues and spending pressures threatened to push the fiscal shortfall 5 billion euros ($8 billion) over target.
Economists welcomed fresh action but cautioned that measures were needed to stimulate demand as well.
"The Irish economy is now in severe crisis mode and the labour market, excluding the public sector, (is) heading for meltdown," said Bloxham chief economist Alan McQuaid.
"Focusing on just simply stabilising the public finances and not targeting economic growth will not work, and indeed is likely to do more damage than good."
"BLAMING DOESN'T HELP"
Ireland is faced with a 4 percent contraction in GDP this year as a protracted property slump combined with a global recession triggers job cuts across all sectors, from solicitors and accountants to builders and shop assistants.
The rate of unemployment rose to 10.4 percent in February, up from 9.6 percent in January, adding further pressure on the public purse as numbers claiming social welfare rose at their fastest pace since records began in 1967.
Accountancy group KPMG said on Wednesday it would axe 200 jobs out of a total workforce of almost 2,000 in Ireland and implement pay cuts ranging from 5 to 10 percent for remaining staff due to the current economic climate.
Separately, U.S. eye-care company Bausch & Lomb said it would seek 195 voluntary redundancies at its manufacturing plant in Waterford, southern Ireland where it employs 1,400 people.
"We understand that this is a difficult and distressing time for those employees facing an uncertain future," it said.
Dublin's previous efforts to slice 2 billion euros off the budget via a pension levy on public sector workers and other measures, triggered a one-day strike by thousands of civil servants and prompted 100,000 people to attend a protest in Dublin.
But faced with a deepening crisis, many people are willing to accept higher income taxes and other penalties as long as they are doled out fairly.
"I think we all recognise that we're in a bad state," said Tom, who works in magazine production. "We can argue that the government are part of the problem ... but that that won't get us out of the hole. Blaming won't solve the problem.
Robert Cecil, who is not working, said he would accept a cut in welfare payments.
"I would be prepared to take a small reduction in social welfare ... 10 percent or whatever."
John FitzGerald, research professor with the Economic and Social Research Institute, a government-funded think tank, said it was unlikely income tax hikes could be brought in fast due to administrative issues for companies.
"There are other things which you can do this year that are administratively simple like carbon tax," he said.
Live register data from the Central Statistics Office on Wednesday showed the number of people claiming unemployment benefit in Ireland rose last month to 354,437, an increase of 26,700 from January.
"Every 100,000 people on the live register is a cost of 1.3 billion euro on the exchequer and that's a huge amount of money," said social and family affairs minister Mary Hanafin.
Economists had expected the live register in February to reach 346,000 and have forecast the rate of unemployment to soar to 12.3 percent by the end of this year, according to the latest median Reuters poll. [ID:LAG00326]
Although the Live register registers numbers of benefit claimants it does not measure total unemployment as it excludes part-time and seasonal workers. (Additional reporting by Andras Gergely; Editing by Ron Askew) (Editing by Toby Chopra, Andy Bruce and Guy Dresser)