The employers' body, IBEC, has denied reports that it might now be prepared to offer workers an extra 3 per cent pay rise to help compensate for high inflation.
The reports emanated from trade union leaders after yesterday's meeting of the social partners at Government Buildings.
The 3 per cent figure which was said to be "in the air" last night would be on top of the 15.75 per cent due under the national agreement over 33 months.
The talks took place against a backdrop of 6.2 per cent inflation in the 12 months to September 30th - and forecasts that it could rise to over 7 per cent when the effects of the current Middle East crisis on oil prices are felt.
Government, employer and trade union representatives were meeting yesterday to make one final effort to agree a common approach before the December Budget. In a joint statement, the social partners said intensive discussions would take place to address the problems created by inflationary pressures.
"Representatives of IBEC, ICTU and the Department of Finance, under the chairmanship of the Department of the Taoiseach, will meet over the coming weeks to bring to a conclusion the examination of options to underpin the operation of the Programme for Prosperity and Fairness in the circumstances which have now emerged."
The general secretary of the Irish Congress of Trade Unions, Mr Peter Cassells, said there would be meetings ahead of the Budget. One group would focus on budgetary issues and a smaller group, involving ICTU and employer representatives, would focus on "inflation and ways of compensating for it".
Mr Cassells said things were at "too delicate a stage" to go into detail.
Other union leaders felt there was "a chink of hope" that agreement could be reached. This was partly based on the fact that IBEC was not ruling out the possibility of pay increases.
A pay rise of 3 per cent was mentioned by several senior trade unionists as a figure which had "emerged" during recent discussions.
However, IBEC's new director of employee relations, Mr Brendan McGinty, ruled out any suggestion that it might offer a 3 per cent rise to the unions. He said employers had simply agreed to "engage in a process to establish a consensus approach to issues of common concern over the next few weeks".
Later, ATGWU leader Mr Michael O'Reilly insisted that the Government and IBEC must give a commitment to provide cash compensation for spiralling inflation. "The latest inflation figures are the final nail in the coffin of the PPF," he said.
"If the Government and employers are not prepared to clearly commit themselves to providing adequate cash payments to workers, the ATGWU will be seeking an emergency ICTU conference to withdraw from the PPF. Furthermore, the ATGWU will instruct our branches and officers to actively seek wage increases well in excess of the pittance offered in the PPF."
The general secretary of the Civil and Public Service Union, Mr Blair Horan, said there was "a consensus that tax rates will have to be targeted at the low paid. But we also need to target pay rises at the low paid if we are to tackle problems, such as those at Aer Lingus, without creating a free-for-all."
MANDATE national officer Mr John Douglas, who also represents predominantly low-paid workers, said the PPF was "predicated on addressing low pay. Inflation hits low-paid workers hardest. Some of our members have only received 1 per cent this year while inflation is over 6 per cent."
The ICTU executive is meeting today to hear a report back on the talks. The general feeling among trade union leaders seemed to be that extra money or a shortened agreement with accelerated increases would be needed on top of tax concessions to save the PPF.