TAOISEACH BRIAN Cowen insisted the Government still wanted savings “of the order of €1.3 billion” in the public sector pay bill in unfinished talks with the trade unions.

“That remains our position, and we wish to discuss with the trade unions on that basis,’’ he said. “Those discussions are not complete.’’

Mr Cowen said that proposals must still be discussed and developed. “However, I made clear what the Government’s position is . . . and we reserve our position until we see if we can find an agreement,’’ he added. “Otherwise we must consider other options.’’

Responding to Opposition pressure to clarify the status of the talks, Mr Cowen said the Government had made it clear that the public service pay bill must make a substantial contribution to the fiscal adjustment required for next year. That was a structural adjustment and, therefore, the savings would be permanent, he added.

The unions had proposed, as a bridging measure pending completion of the various efficiency measures involved in transformation, that there would be an agreed reduction in pay rates next year, said Mr Cowen.

That commitment to change would be recognised by permitting staff to take 12 days of unpaid leave over a period of years on a basis that it did not disrupt the delivery of services, he added.

“Proposals emerging from the discussions were considered by the Government yesterday and it was indicated to the unions that they did not, in their present form, provide a basis for the Government to confirm that it would not consider other options to effect the necessary savings,’’ he said.

“The public service unions responded by indicating they wished to continue to develop their proposals, and I welcome the fact that in that context the planned day of industrial action for tomorrow has been postponed.’’

Fine Gael leader Enda Kenny said it seemed as if the Government had abdicated its responsibility to sort out the economic mess into which it had led the State. “It is not possible to get permanent savings by having a further 12 days’ holidays,’’ he added. “It is not possible to give the same level of service with 5 per cent less man-hours.”

Mr Kenny asked where was the fairness in a situation where a person on the minimum wage would have the same proportion of a cut as somebody on €100,000.

He added: “How many gardaí will be taken off the beat as a consequence of this ? How many operations will be cancelled? How many classes will be left without teachers? How many children will be put at risk because of fewer social workers working 5 per cent less hours?’’

Labour leader Eamon Gilmore said he welcomed the fact that there would not be a strike.

“Some of the strident voices that appear to wish for conflict are not helping the situation,’’ he added. Mr Gilmore said his party had argued for months that the reductions in the public service pay bill should be achieved by way of a negotiated agreement which would involve significant public service reform. “The difficulty the Taoiseach is in is that he did not engage in those discussions until the 11th hour,’’ he added.

Mr Cowen said efforts were being made to see whether there was an agreed way forward on how to achieve the €1.3 billion in savings. “In the meantime, the Government is reserving its position,’’ he added.

Mr Gilmore asked how the Taoiseach would get €1.3 billion in savings, “if he finds himself this day week, either with no agreement or with one that he is unsure will be confirmed in a subsequent ballot’’.