The prospect of jail closures and privatisation of prison services appeared to move closer yesterday following the breakdown in talks over prison officers' overtime.
Mr Seán Aylward, director general of the Prison Service, said he would be presenting a number of options to the Department of Justice within the next few days.
Asked if these included measures such as privatisation and some prison closures, he said he was "not ruling anything in or anything out".
Both Mr Aylward and the Department of Justice said last month that such moves would be considered if a deal on overtime proved impossible.
The Minister for Justice, Mr McDowell, had set a three-month deadline for a new overtime regime to be agreed when he addressed the Prison Officers' Association annual conference at the end of April.
Discussions between the Prison Service and the association have failed to reach a resolution, however, and yesterday both sides engaged in strongly-worded criticisms of the other.
Mr Aylward accused the association of engaging in "Alice in Wonderland-style industrial relations", and said its proposals would have cost more than the existing €64 million prison overtime budget.
"They wanted us to pay them more than what they currently get, but for doing less work. That would be ludicrous," he said.
Mr Eugene Dennehy, deputy general secretary of the association, claimed management's proposals would have involved "enslaving prison officers".
He "absolutely" rejected the contention that the association's proposals would cost more than the current overtime budget. "We cannot understand where he (Mr Aylward) is getting his figures from."
The row centres on the Prison Service's proposal to introduce an annualised hours system, which would see prison officers paid flat-rate amounts for working up to 360 overtime hours a year, regardless of how many extra hours they actually worked.
The association says this would have the effect of putting members on a 47-hour week, instead of 39 hours as at present.
"Members would be required to work the equivalent of a six-day week, and on a totally flexible basis," Mr Dennehy said.
He disputed Mr Aylward's assertion that, during the recent talks, the association had sought a package which would involve working even longer hours.
The association yesterday wrote to Mr Aylward asking for the Prison Service's offer to be set out in writing, so that members could ballot on it.
Mr Dennehy declined to speculate on the possibility of industrial action in the event of moves towards privatisation or closures taking place.
Mr Aylward said management was prepared to enter further discussions, but not if they were for the purpose of "buying time".
He accused the association of thinking the finances of the State were a "bottomless pit", when "like every other service, we're up against the wall".