The Government will move today to defuse the controversy over its Budget tax measures in an attempt to enable partnership negotiations to continue.
It also hopes to take the steam out of the unprecedented revolt within the Fianna Fail parliamentary party.
The first signal of the Government's intention to review the Budget came in the Dail yesterday when the Taoiseach, Mr Ahern, said that achieving the necessary balance between single and double-income families would "be a subject of both political discussion in Government and negotiation with the social partners."
Mr Ahern, the Tanaiste, the Minister for Finance and all available Ministers held an emergency meeting last night to consider a response to what a Government spokesman described as "a political problem" over the tax treatment of single and double-income families. The meeting may resume this morning.
"We need to reflect on the strength of the views expressed," the spokesman said after over 20 members of the Fianna Fail parliamentary party, apparently with ail with the official party approval, demanded a reversal of the measures.
It is clear also that the Taoiseach will have to offer substantial benefits to low-income groups when he meets trade union leaders today in an attempt to salvage talks on a successor to Partnership 2000.
It is understood a single proposal is to be put forward to the parliamentary party meeting this morning which the Government hopes will address both issues, although the principle of individualisation will remain intact.
Mr Turlough O'Sullivan, the director of the Irish Business and Employers' Confederation, said last night that employers had no objection in principle to extra tax concessions to the low-paid, provided these remained within the agreed fiscal parameters.
Government sources indicated yesterday that the coalition partners had no idea what could be done to contain the political and trade union anger at last week's Budget. The Cabinet asked the Minister for Finance to "put flesh" on the three-year tax strategy which he announced on Budget day, as most Ministers were unaware of the details of the proposals.
However, it became clear last night that the individualisation proposal, which appears to favour double-income families, will remain but that a commitment to introduce a balancing measure will be announced today. The full details of the concessions may not be available for 48 hours.
It is understood that one of the proposals being considered is a shortening of the three-year time frame announced in the Budget.
The Taoiseach told the Dail it was for "further discussion what level of relief is appropriate to take account of any individual or couple's domestic or family circumstances." He said the Budget measures were aimed at "reversing the discrimination suffered up to now by single workers who entered the higher tax bracket far too soon and by married couples who both work outside the home".
Mr Ahern will meet trade union representatives today to discuss their unease over the Budget treatment of the low paid.
Three of the four independent TDs who support the coalition last night expressed their satisfaction following a meeting with the Government Chief Whip, Mr Seamus Brennan. The Kerry South TD, Mr Jackie Healy-Rae, said they had made their "case clearly and firmly and we were told that everything could be taken on board and that the Government would come back to us."
Fianna Fail TDs were keen last night to stress their role in provoking Government concessions. One said: "We have to be seen to be solving this problem, not the four independents."