Talks on a national pay deal will resume on Sunday after breaking up last night with employers and unions deeply divided on the duration and size of any pay increase.
The talks were adjourned at 10.30pm after senior Government official Dermot McCarthy, who is chairing the talks, separately told both sides that in his assessment the gap was too wide for him to attempt to broker an agreement.
It is understood the employers' body, Ibec, was holding out for a three-year deal involving pay increases in "low single figures". Ibec is also resolutely opposed to union demands for a local bargaining clause that would allow workers to pursue "top-up" increases from highly-profitable employers.
Unions favour a shorter deal due to uncertainty over inflation, and annual increases well in excess of the most recent inflation figure of 3.8 per cent.
There were indications last night that, if a deal can be agreed, it is likely to be of a two-year duration. A special "flat rate" increase for the low-paid was also being insisted upon as a "must" by the union side.
Today had been a target date for completion of a pay deal given that the State's biggest public sector union, Impact, begins its biennial conference in Killarney, Co Kerry, tonight.
ICTU general secretary David Begg said today: "These things ebb and flow. I quite genuinely don't know if agreement can be reached. "The whole question of pensions is a demographic timebomb. We have to try to find some way of dealing with problems of that nature."
Mr Begg said he found it difficult to read into the minds of the employers' organisations. The parties will reconvene at Government Buildings at 2pm on Sunday to see if a basis can be found to move the process forward.
Bill Roche, professor of industrial relations and human resources at UCD, believes that the differences between employers and unions are significant but surmountable.
He said: "The gap seems to be a serious one but I think talks about the imminent collapse of national pay agreements are probably invalid. "It has almost become part of the standard choreography of pay talks that major crises arise, particularly before closure on the deals."
He told RTE Radio: "The gap is definitely serious but may not be unbridgeable.
"In the past when difficulties like these have arisen, the parties have gone away and reflected on their positions. In the interim, the secretary of the Taoiseach's Department has engaged in shuttle diplomacy between them to try to find the basis of a settlement.
"To say the whole process in on the verge of collapse is really quite premature."
Taoiseach Bertie Ahern expressed pessimism in the Dail yesterday that a deal could be reached.
He said: "I have been advised that there is a considerable difference between the sides on the parameters of a pay agreement, as well as on some significant non-pay items. It is far from clear that an agreement can be reached."
He added: "I do not see two sides engaged to find a resolution right now."