The Health Service Executive has written to the Irish Nurses Organisation and the Psychiatric Nurses Association confirming that it will deduct 13% from nurses' salaries if they do not call off their work to rule.
The HSE says it can no longer sustain a situation where large numbers of staff who are breaching their employment contract continue to receive full pay.
The news comes after members of the Irish Nurses Organisation and Psychiatric Nurses Association staged the longest work stoppages of this dispute to date in six different hospitals around the country.
The HSE estimates that the current nurses' dispute is costing around €2m a week in extra overtime and agency workers.
This ultimatum from Brendan Mulligan of the HSE-Employers Agency gives the INO and PNA until 5pm Thursday to call off the work to rule. If not, they will deduct over 13% from the salary of each nurse failing to carry out all duties.
They will also withhold the 2% national pay rise due on 1 June.
Health Minister Mary Harney said people could not expect to remain on full pay when they were not performing all their duties.
Assistant General Secretary of the INO, Dave Hughes, warned that if money is taken back, it will poison the atmosphere for many years to come and trigger an escalation of the dispute.
Further two-hour stoppages are planned for tomorrow in Galway, Kildare, Cork, Cavan, Kilkenny and Dublin.
There will be three-hour stoppages on Friday.
Earlier, the INO had said that an implementation date for a 35-hour working week would help break the current impasse in the dispute.
Work stoppages
Nurses took part in work stoppages at Waterford Regional Hospital, the Midlands Regional Hospital and Letterkenny General Hospital this afternoon.
Earlier today, stoppages were carried out at Tallaght Hospital, Mercy University Hospital in Cork and Monaghan General Hospital.
Around 300 nurses held protests at the gate of Tallaght Hospital in pursuit of their claim for a 10.6% pay rise and a 35-hour working week.
Mental health services at each of the facilities were also affected by the work stoppages.
More than 340 appointments and procedures were cancelled across the country today according to the HSE. It says the longer stoppages are having a significant impact on patient care and the impact on mental health services have also been described as substantial by the HSE.
It is estimated that tomorrow's stoppages will lead to more than 300 cancellations of appointments and procedures.
On Thursday Minister Harney along with representatives from all the political parties will address a special delegate conference organised by the INO.
