Public sector unions have said that the Government must 'significantly improve' its pay offer to prevent industrial action ballots next month.

Public sector pay talks are due to resume at the Workplace Relations Commission on Monday.

Talks ended without agreement in June after unions and staff associations rejected a 5% pay increase over two years saying it fell far short of inflation.

The Government defended the offer saying that the increases would come on top of a 2% rise already in place under the existing public sector pay agreement, delivering a cumulative increase of 7% and bringing the total cost of the pay deal to €2.3 billion.

President of the Irish Congress of Trade Unions Kevin Callinan said they would be flexible in next week's pay talks and would engage positively but added that the Government's position in June had not reflected the reality of the cost-of-living crisis.

"The Government side has taken over two months to reflect on its position. Increased and sustained inflation during that period has not made it easier to reach an outcome that unions can credibly put to ballots of workers struggling with soaring increases in the cost of fuel, food, housing, childcare, and many other essentials, which were underpinned by today’s announcement of 35-39% additional hikes in home heating bills this winter," Mr Callinan said.

"Minister Michael McGrath has indicated that the Government will make an improved offer on Monday, and we look forward to finding out if it will be enough to move towards an outcome that we can credibly put to workers in ballots," he added.

Last week, the Minister for Public Expenditure and Reform said the government would make a "revised offer" to unions at the WRC when the talks resume.

Mr McGrath said that both sides in the talks will need to be flexible in order for a realistic agreement to be reached.