Marathon talks between the Government and public sector unions aimed at securing €1.3bn in cuts in the upcoming Budget adjourned this morning at Government buildings without concrete agreement.
Despite earlier reports saying a draft deal was imminent after the interventions of the Taoiseach and Finance Minister, Government sources said there was still work to be done.
Union representatives however insisted progress had been made, with a range of proposals under discussion aimed at securing the necessary savings without enforced pay cuts.
"A number of key ideas were thrashed out," during the 23-hour talks, according to spokesperson for the Irish Congress of Trade Unions Macdara Doyle, with Cabinet to discuss developments in the talks during its morning meeting.
Failure to reach agreement would result in Thursday's planned one-day strike by public sector workers going ahead.
Union proposals are understood to centre on the idea of unpaid leave for civil servants of up to 20 days, instead of salary cuts.
Congress chief David Begg said following the talks that the Government had acknowledged that "pretty good progress" had been made.
"They have to make a judgment about whether it's enough from their point of view, and we have to make a judgement about whether our side are happy with it," Mr Begg said.