Talks on a new national pay deal were nearing collapse last night, and meetings planned for this weekend have been cancelled.
After two days of intensive negotiations, employers and unions acknowledged yesterday that the gap between the two sides appeared to be unbridgeable.
"It's fair to say things are moving in a direction towards breakdown," a source at the talks told The Irish Times.
Working groups set up on Wednesday to try to break the deadlock in different areas, such as pay increases, redundancy pay and union recognition, had been due to hold discussions throughout the weekend.
With the talks on pay failing to make progress, however, it was agreed that the two sides would step back from the process today and tomorrow.
Informal contacts are to take place over the weekend, and discussions will resume on Monday, but unless some common ground can be found by then it is expected the talks will break up early next week.
That could lead to a return to free-for-all pay bargaining for the first time since the 1980s, but it is considered likely that the Taoiseach, Mr Ahern, will intervene in an attempt to save the social partnership process.
It is understood that unions sought a pay increase of 5 per cent for next year at yesterday's talks. Employers are insisting on a six-month pay pause followed by a pay increase in low single figures.
Representatives of the community and voluntary sector, meanwhile, have asked for a meeting with Mr Ahern to seek Government commitments on a range of issues before they agree to sign up to a new social partnership deal.
Mr Dónall Geoghegan of the National Youth Council said the meeting was sought yesterday during "fairly robust" discussions with Government officials.
The meeting was the first since the Budget between the Government and the community and voluntary sector, which is one of the social partners.
Mr Geoghegan said the Government had failed to meet commitments in a number of areas including community employment schemes, social welfare payments, child benefit and medical cards.
