The Government has proposed that potential outsourcing projects worth less than €10 million should be exempt from current restrictions on the outsourcing of services.

Under the Croke Park Agreement of 2010, outsourcing of "smaller scale" projects was permitted.

However, informed sources said the Government had proposed that the threshold for permitting such projects should be increased to €10 million.

In addition, the Government told unions it wants to be able to incorporate potential savings from cheaper labour into the cost-benefit analysis for outsourcing services.

At present, labour cost savings may not be factored into the business case for outsourcing.

After the management presented its case, the country's largest union SIPTU described the Government outsourcing proposals as "utterly unacceptable" - and reiterated that outsourcing was a red line issue.

The union's vice president and chief negotiator Gene Mealy warned that there was no guarantee that a new public service agreement can be reached with the Government.

The Government also reiterated proposals to review Saturday working, which could see the abolition of existing Saturday premium payments, as well as more public servants extending the working week to include Saturday as a normal day.

Mr Mealy said it was now wildly optimistic to think that a deal could be done by the original target date of this Friday.

It is now accepted that the negotiations on an extension to the Lansdowne Road Agreement will run into next week, with no talks likely to take place over the Bank Holiday weekend.

The talks are in their eighth day and a number of unions have voiced frustration that detailed costed proposals specifying potential pay rises or increases in pension contributions for some Government employees have not yet been put forward.

At a number of sessions in recent days, the Government has stressed the limited financial room for manoeuvre in 2018, with a fiscal space of just €200m - only some of which can be allocated to pay.

This means that unions face difficult choices.

For instance, they will have to dampen expectations of immediate full restoration of the pay cuts imposed during the recession, as any new deal will have to be phased to give the larger increases at the end rather than the beginning of the agreement, which some expected to run over a three-year period.

Unions will also have to choose how to prioritise whatever money is eventually allocated to pay.

It is understood that IMPACT General Secretary Shay Cody, who is the chief negotiator on the union side, has told fellow unions that if special pay deals are done to address recruitment and retention difficulties in groups including doctors and nurses, that will reduce the money available for general pay restoration.

They will also have to decide collectively whether they wish to prioritise pay restoration for "two-tier" employees including teachers who were recruited on lower pay and conditions and are now working for significantly less than people recruited before 2012.

That would also reduce the amount available for general pay restoration.

Also contentious are management demands for significant concessions on productivity and reform, including expanded Saturday working without premium payments, and more open recruitment from the private sector.

However, many unions including SIPTU have warned that pay restoration should be on a no strings attached basis, with productivity negotiated separately.

Unions have already categorically ruled out a management demand for a loosening of the restrictions on the outsourcing of public services.

For their part, the management side has insisted that the 15 million additional unpaid hours imposed during the recession will not be rolled back.

While the tabling of proposals today should ratchet up the engagement at the talks somewhat, observers expect that the real negotiations will not get under way until next week.

However, at that point there will still be a complex and difficult agenda to work through, with no guarantee of a deal.