Minister for Transport Shane Ross has warned his Cabinet colleagues that Bus Éireann faces insolvency within two years.

Mr Ross said the company was at a crisis juncture and faces serious financial difficulties, which had been set out to him by the company's chief executive Martin Nolan.

Mr Nolan has previously said the company lost €5.6 million last year and has projected a €6 million loss this year.

A deputy Government spokeswoman said the issue was brought up due to a meeting at the Labour Court where staff at the bus firm are seeking pay increases of up to 21 per cent.

Dublin Bus staff secured increases of 11.25 per cent over three years following a series of strikes earlier this year.

Management at Bus Éireann has ruled out pay rises for staff in general and has put forward controversial plans to separate its loss-making Expressway service from the rest of the company. This would involve the introduction of lower terms and conditions for those working in the division.

Management wants to reduce staffing levels at Expressway by up to 150 and has not ruled out compulsory redundancies.

Management consultants brought in by Bus Éireann are currently reviewing these plans.