Talks between unions and public service management on reducing the State's pay and pensions bill by €1billion over three years are resuming this morning.

The move comes in advance if a deadline of Monday set by the Government for the head of the Labour Relations Commission to report back on whether he believes a negotiated solution is possible.

At talks today, management is to meet with unions representing higher level public servants on exploring the issue of pay cuts.

Under the proposed Croke Park II agreement, which was rejected by unions last month, staff earning more than €65,000 would have faced pay cuts.

The Government is insisting in the new talks that €300 million in savings from its pay bill have to be made this year.

If there is no agreement, the Minister for Public Expenditure and Reform Brendan Howlin is expected to bring recommendations to Cabinet on Tuesday. These are likely to involve legislation to provide for a pay cut as well as measures to apply in specific parts of the public service such as reductions in premium and overtime rates and reforms to rosters.

Talks between health service management and unions which went on all day on Friday will resume tomorrow afternoon.

Proposals put forward by unions as an alternative to cuts in earnings included nurses taking over some duties carried out by doctors, the introduction of a system of annualised hours for staff to reduce overtime and unions sourcing staff to work as agency personnel for the health service.

Talks are also scheduled tomorrow with Garda representatives and the union representing lower-paid civil servants.