ICTU said today it had received assurances from the Department of Finance that full payment of benchmarking awards by the end of next year has not been ruled out.
The announcement came after reports last week that impending cuts in public services mooted by the Minister for Finance, Mr McCreevy, together with comments by the Taoiseach, Mr Ahern, meant that the State could not afford the payments, which would cost at least €1.1 billion.
Mr McCreevy said last Thursday there is a need for a "disciplined approach" to spending to maintain the strength of the Irish economy.
However, Mr Ahern said: "The cost of benchmarking is €1.1 billion. Implementing it this year or next would be a great idea if there was a spare billion around. In fact, we are overspending by about a billion."
The Department said the reports were simply a misunderstanding based on the assumption the whole of the balance of the awards was to be paid by the beginning of 2003.
ICTU said today it had never sought full payment by the start of 2003, but restated its intention to have it paid in full by the end of the year.
"We have undergone a rigorous exercise that shows the pay of public servants has fallen behind private sector workers doing similar jobs. That imbalance must be addressed within a reasonable timeframe," said Mr Peter McLoone, ICTU Public Services Committee chairman.
"If the Government drags out implementation beyond next year the increases will devalued and public servants will simply not accept the deal," he added.
The two sides have agreed a timetable for talks on implementation. They will start in September and hope to reach agreement by the end of November.