A "major effort" to control public expenditure without resorting to tax increases would be required as part of any new national partnership deal, business leaders said yesterday.

They told the Government that, if social partnership was to continue, a "substantially different model" than the current Programme for Prosperity and Fairness (PPF) would have to be negotiated. Measures to encourage competition, control inflation and tackle rising business costs such as insurance and energy will be priority issues for the business sector.

A delegation led by IBEC director general Mr Turlough O'Sullivan told Government representatives that restoring competitiveness would be the key to any new agreement.

The two sides met at Government Buildings in the second of a series of discussions taking place between the Government and the social partners this week.

Meetings will be held today with representatives of the farm and community and voluntary sectors. It is hoped the shape of a potential agreement, to succeed the PPF, will begin to emerge after a second round of talks next week.

In a paper presented yesterday, the business sector said it was committed to the partnership process if "fundamental issues" were addressed.

The paper, prepared by IBEC, said action to control inflation would be required as well as a major effort to keep down public spending. It called for the use of private-sector expertise in the reform of public-service delivery. It also called for steps to deal with quality-of-life issues, including transport, housing and childcare.

The document did not, however, deal with the pay issue, which is likely to be the most contentious element of negotiations.

Meanwhile, the Conference of Religious in Ireland (CORI) has rejected criticism by IBEC of its stance on taxation going into the partnership talks. Father Seán Healy of the CORI justice commission said infrastructure and social provision could not be improved to EU average levels without providing the tax-take to fund the necessary improvements.