The Green Party leader made the comments in response to questions relating to the ongoing social partnership talks between the Government and trade unions.
At the heart of the talks is the need to axe €4 billion from Exchequer spending.
Commenting on the talks Mr Gormley said he did not want to get into a divisive row with the trade unions, but suggested the country already had “a type of civil war... between the private and public sectors”.
“I don’t want to exacerbate that any further. But it is clear now that we are coming into a difficult budget. We have to make difficult decisions. I hope, I genuinely hope, that we can continue with social partnership.
“I would say to people who are representing the public sector, do we take cuts or is it a case of having your cheques bounce because we’ve nearly got to that stage and those people who believe that it’s impossible, that we could go on, that we could continue to borrow that amount of money and not face dire consequences down the road, are not living in the real world, I’m afraid,” said Mr Gormley.
On his perceived gap between the private and public sectors the minister said he had never seen such divisiveness in his time in politics and it was “very regrettable”.
“You’re getting this clear break down the middle,” he said in an interview on Newstalk radio.
“I don’t believe, frankly, it’s healthy. I don’t believe we have a public sector Ireland and a private sector Ireland: we have one Ireland where we need to work together, all of us,” he said.
“If we go down this particular route and say, well, we’re looking after our section of society, it becomes a sectoral war and it’s not going to lead to the sort of consensus that is now required.
“That’s what partnership was originally about, getting that consensus. That consensus seems to be gone out the window at this stage.”
Responding to the comments, Bernard Harbor of the country’s largest solely public sector union said the comments from a Government minister were extremely irresponsible.
“There is no civil war between the public and private sectors,” said Mr Harbor.
“The only divide is between those who have caused the recession, the bankers and the speculators, and those who are suffering as a result of it.”
Joe O’Flynn of SIPTU, which represents both public and private sector workers, said much of the information being put into the public domain on the perceived gap between the two sectors was instituted by organisations of the state.
“The Economic and Social Research Institute (which found pay gaps of 26% between the two sectors) has been the master of it in the past few months,” said Mr O’Flynn.
“They are trying to drive a rift between the two sets of workers. We have been working on the basis that all workers, whether public or private, have all been affected by the downturn,” he said.