The Government and Trade Unions have agreed to work together in an effort to diffuse the growing unrest over public service pay. In a statement released tonight, the Government said talks on a new Partnership model to succeed Parnership 2000 would continue. However, the Director General of IBEC, John Dunne, has said that he is not optimistic that a new agreement could be reached.

Today's meeting between the Government and the Unions, followed warnings from the Minister for Finance that if Unions continued to make what he termed unreasonable pay demands, there would not be another partnership programme. Mr. McCreevy said that some of the wage demands being made by certain public sector Unions were unrealistic and would not be entertained by the Government.

In a separate development, the ICTU has asked the Labour Court to intervene in the dispute at Dublin Bus, where a one-day strike is threatened for Thursday. Congress has asked the two unions involved, SIPTU and the NBRU to defer the action, pending the Court's consideration of the issues.