New figures showing tax revenues running £1 billion ahead of target have fuelled demands on the Government to negotiate a settlement with nurses to avoid the threatened strike.
The booming revenues will also increase the pressure to unveil significant tax reductions in December's budget to pave the way for a new national agreement.
The Government yesterday announced that the Exchequer surplus was running at £6.18 billion at the end of September, or £2.51 billion excluding the sale of Telecom Eireann, now Eircom.
Tax revenues are £1 billion ahead of the Budget target, while spending is running about £100 million ahead.
Leaders of the four nursing unions were adamant that the Government now had no excuse for not brokering an "honourable settlement" to avoid chaos in the health services - in spite of Mr McCreevy's warnings on public spending.
However, the Minister said in a statement that pressures on Government spending "underline the difficulties being faced by Government in holding the growth in day-to-day expenditure to the limits set out on Budget day".
He added that of "particular concern" to the Government is the slippage in public sector pay and the deteriorating industrial relations environment that has gone with it.
"These developments are not sustainable if we are to ensure that the economy continues to grow strongly," he warned.
Despite the spending pressures, the exchequer finances remain extremely healthy due to the strength of tax revenues. The Minister is predicting that the overall surplus of spending over revenue for the year will be £1.7 billion. This is almost double the amount predicted on Budget day of £925 million.
The Government is coming under increasing pressure to concede to the nurses' demands to head off the strike in two weeks time.
"Ten years ago the country was in recession," Mr Liam Doran, general secretary of the Irish Nurses Organisation said. "If you cannot address the nursing crisis now, when can you?"
There was only one way of preserving the integrity of the health services, he added: by putting more money into them.
SIPTU's national nursing officer, Mr Oliver McDonagh, similarly felt there could not be a better time to settle the nurses' issue. The Government could have no defence for denying the claim.
The extra £1 billion made it much more difficult to explain to any group of workers, not least the nurses, that they should be prepared to expect a "lesser settlement", said Mr Kevin Callanan, IMPACT's national secretary.
The strong exchequer position will allow the Government room for manoeuvre in deciding on the new national development plan, as well as paving the way for considerable tax cuts in the December Budget.
The employers' organisation IBEC said the exchequer finances provide a once-off opportunity to deal with major economic and social challenges. IBEC, along with major unions, are also calling for significant tax concessions in the Budget.
The SIPTU vice-president, Mr Des Geraghty, said the union's pre-Budget submission was based on the Minister being able to spend £1 billion on fundamental tax reform.
Doing so "would be good for the economy and enable the Minister to bring about the kind of changes in the redistribution of the tax burden and allow much greater transparency and equity in the system".
The large surplus comes as Mr McCreevy is holding initial discussions with other Ministers on departmental spending for next year.
He held opening meetings yesterday with the Tanaiste, the Minister for Public Enterprise and the Minister for the Environment as part of the official Estimates programme for next year. Officials said initial demands from all departments were well ahead of Government spending targets.