General Secretary of the Irish Congress of Trade Unions David Begg has said the introduction of a social solidarity pact would be fairer than the current proposed solutions to the economic crisis.

SIPTU General President Jack O'Connor said yesterday that time was running out for agreement on such a pact and warned of the process escalating out of control.

Mr O'Connor accused some in the financial services industry of 'waging psychological terror on PAYE workers'.

He was responding to a report from Goodbody Stockbrokers warning that social welfare payments might have to be cut in response to the deepening crisis in Ireland's public finances.

Last night on RTÉ's Questions and Answers, Mr Begg said it was always going to be difficult to strike a deal with which all the parties were satisfied.