A breakdown in the Programme for Prosperity and Fairness appeared less likely last night after employers agreed to join the Government and the social partners in new talks.
The discussions will consider a trade union "shopping list" of measures to compensate workers for inflation.
ICTU and employer representatives adopted a conciliatory tone after yesterday's opening meeting at Government Buildings. Next week plans for tax cuts and social welfare improvements, improved childcare and measures to deal with the cost of housing will be discussed.
Mr Peter Cassells, the ICTU general secretary, insisted he would also be seeking "compensatory pay increases". But the employers' organisation, IBEC, is resisting such increases.
Mr Cassells said all sides acknowledged there was a serious problem as people, "particularly on low incomes and pensioners on fixed incomes are having their living standards eroded by the sudden surge in inflation".
Yesterday's meeting was the first in a series to tackle the situation where inflation is running at 6.2 per cent while this year's pay increase under the PPF is just 5.5 per cent.
The Taoiseach, Mr Ahern, acknowledged that inflation meant tax cuts would have to be considered as well as "other issues for the less well off in our society", but said there was no question that the PPF would collapse.
Mr Cassells said the agenda for next week's series of discussions would include "compensatory pay increases and creative ways of trying to deal with that".
The "creative ways" to be examined will include accelerating employers' plans - agreed in the PPF - to introduce profit-sharing schemes. As business profits continue to grow, employers are under pressure to help to solve the difficulties.
IBEC's director-general, Mr Turlough O'Sullivan, chose not to flatly reject the ICTU position on pay rises, speaking instead of persuading the unions of the merits of an alternative course.
"We are very confident that we will be able to persuade Congress in the discussions that will ensue that to pursue pay increases would be counterproductive and that a much more productive way of giving something back to working people is through the tax system," he said.
Mr Ahern said the only people who had lost out as a result of inflation were some of those on social welfare. In relation to workers, he said, while inflation had "eaten back some of the increases . . . certainly workers have not lost". In many sectors, "when you take in the tax and pay agreements people will still be a long way ahead in real take-home terms".
The director of the justice commission of the Conference of Religious in Ireland (CORI), Father Sean Healy, yesterday called on the Government and social partners "to ensure that those who have lost most due to the current inflation situation should have first call on available resources".