The meeting between the Taoiseach, Brian Cowen, and the Irish Congress of Trade Unions on a new national economic recovery deal has ended.
Leaving Government Buildings, ICTU President Jack O'Connor said there had been an animated and frank exchange of views on differences between the government and the unions.
He said it was a matter of public record that the Government envisages a short sharp correction in the public finances, and was reluctant to extract any additional contribution from wealthy people.
He said both of those positions were at diametric variance with the position of trade unions.
He said he did not know if it would be reasonable to say that unions had made much progress in convincing the Government side of the superiority of a fairer approach.
But he warned that either they would do a fair agreement - which was the only way forward - or the country was heading into a period of confrontation.
He said future moves that would impact on public sector workers pay would not meet with the same level of acquiescence that greeted the imposition of the pension levy.
He said he believed that the Taoiseach wanted to achieve a measure of agreement, but was very cognisant of the consequences of attempting to impose detrimental change unilaterally on working people, and the degree to which that would be resisted
He said there would now be a short period of reflection, and there may possibly be another meeting if people on the on the Government side decide they want to invite the unions back for further discussion.
The executive council of ICTU will meet tomorrow morning to be briefed on the meeting.
Cowen hints at further public pay cuts
Earlier, Mr Cowen hinted at further public sector pay cuts in December's Budget.
Responding to questions from the leaders of the Opposition, Mr Cowen said that all areas of public spending would be on the table.
When asked by Fine Gael leader Enda Kenny if the lower and middle income earners in the public sector would be immune to paycuts, the Taoiseach said it would not be possible to draw up a budget to achieve the desired scale of savings if certain areas of public spending were excluded from the equation.
Labour Leader Eamon Gilmore asked the Taoiseach if he would try to secure agreement with the social partners this week on how the public pay bill could be reduced.
Brian Cowen said the Government was prepared to discuss views with the partners but would maintain the position as an employer that 'a contribution must be made from that side of the equation that can't be avoided.'
