Significant differences have emerged between unions at the ESB over the company's €511 million pension deficit.

As a result, it was not clear last night whether the unions would be able to present a united front at a crucial meeting with ESB management on the issue scheduled for Wednesday.

Some unions are resisting any changes to how the ESB pension fund operates and reject suggestions that staff should increase their contributions to meet the shortfall.

However, other union representatives believe some compromise on the pension shortfall is necessary to secure an overall package. This group believes it is unrealistic to expect the company to foot the pension liability alone.

Earlier this year the ESB unions gave their support to a claim for an 18.5 per cent pay increase and a 20 per cent shareholding in the company. But since then there has been little agreement on how best to secure these goals.

The two demands, plus issues relating to structural and organisational change, will be debated by management and unions on Wednesday in talks chaired by the former general secretary of ICTU, Mr Peter Cassells.

The electricians' union, the TEEU, has already indicated in a paper that it is strongly against any proposals to have staff increase their pension contributions.

It has also rejected suggestions that indexation of the ESB pension be capped in some form. The TEEU has also ruled out transforming the pension fund from a defined benefit scheme to a defined contribution scheme. The craft unions at ESB are believed to have some sympathy with these views.

Some unions are unhappy with the emphasis being given in the talks to getting a 20 per cent stake in the company. Certain union representatives believe the Government will not increase the staff shareholding beyond 14.9 per cent.

The talks over pensions, pay and shares are likely to be protracted and difficult. Any increase in pay rates will automatically worsen the pension shortfall.

Sources estimate that a 1 per cent increase in general pay rates could add €30 million to the pension deficit. A 9 per cent pay rise for instance would add €270 million to the pension deficit.

Consequently, the focus has switched to other ways to secure an agreement, with unions pressing for non-pensionable lump sum payments. However, it remains to be seen whether ESB management or the Government would be prepared to sanction such arrangements.

The company said yesterday that it would not comment on the policy of different union groupings.