The Taoiseach has held the first of a series of meetings with the social partners in a bid to tackle the worsening economic crisis.

The €20bn public sector pay bill will be central to the discussions and pay cuts have not been ruled out.

Employers' group IBEC was being briefed on the economic background today, while the ICTU will be briefed tomorrow.

IBEC has called on the Government to shed up to 20% of public sector jobs because of the current economic crisis.

IBEC Director general Turlough O'Sullivan said it would be 'wrong and unsustainable' if there were no job losses in the public sector at a time when the private sector had lost over 100,000 jobs in the last 12 months.

Speaking as he arrived at Government Buildings to be briefed by the Taoiseach, Mr O'Sullivan said that industry was shedding between 10 and 20% of workers.

Mr O'Sullivan said he did not see why the public service, which he described as overstaffed, should not reflect what was feasible in the real world.

Yesterday, the Cabinet spent over six hours considering the latest Department of Finance projections which showed plummeting revenue, soaring debt and unemployment.

The aim of the briefings is to achieve agreement on a national strategy to get financial matters under control by the end of the month.

However, both Mr Cowen and Minitser for Finance Brian Lenihan have made it clear that unpalatable choices lie ahead.