PRESS DIGEST-New Zealand newspapers - July 21

WELLINGTON, July 21 (Reuters) - Following are some of the lead stories from New Zealand metropolitan newspapers on Tuesday.

Stories may be taken from either the paper or Internet editions of the papers.

Reuters has not verified these stories and does not vouch for their accuracy.

DOMINION POST(www.stuff.co.nz)

Public servants told to lift game: A quarter of a million public servants have been told more jobs are on the line as the Government considers greater use of private contractors to deliver state services. - - - -

No pixies printing cash says Key: Prime Minister John Key has warned that the country cannot afford a "gold-plated" welfare scheme as the number of hard-luck stories rises.

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Super Fund takes more in-house: New Zealand's $13.1 billion retirement nest egg has dumped ING and NZX NZX.NZ subsidiary Smartshares from its ranks of external managers and moved their investment portfolio management in-house. - - - -

Fonterra vows to keep co-op model in reform: Fonterra is looking at a three-to-four-year staged process with a possible initial supplier vote in November as it takes a second stab at reforming its capital structure.

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NEW ZEALAND HERALD (www.nzherald.co.nz)

Trim fat from public sector: Treasury chief: John Whitehead has warned public sector heads if they do not face up to a "fundamental rethink" to trim fat out of their departments, they will have change forced upon them.

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First Step investors told money shaky: Around 7000 investors who had $457 million locked up in six investment trusts in 2006 have been warned by the trustee more than half of their money may now be at risk.

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Delegat toasts 61 per cent profit surge: Jim Delegat says improved sales for Delegat Group DGL.NZ wine in June helped a 61 per cent surge in full-year profits.

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NZ Post signs up for cloud service: New Zealand Post is venturing into the clouds with a three-year Google email and messaging service contract that it says will save it $2 million.

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