The Government has come under pressure to abandon its plan to deny top-level State employees, including senior civil servants and judges, special pay increases until 2007.
In a letter to the Minister for Finance, Mr McCreevy, the County and City Managers' Society, which is chaired by Fingal county manager, Mr Willie Soffe, has protested strongly against the move.
The Minister has decided not to establish the Review Body on Higher Remuneration, which has looked at pay scales for top staff throughout the civil and public service every four years since 1969.
Meanwhile, it has emerged the pay freeze will affect members of the Cabinet and other political office holders. However, they will continue to get pay rises as TDs because the pay of TDs and senators was linked to the Civil Service principal officer grade four years ago.
The Buckley Review Group delivered major increases for senior political figures when it reported in September 2000, when it recommended a 22 per cent rise for the Taoiseach, 21.8 per cent for the Tánaiste, while ministers and the Ceann Comhairle received 20.3 per cent, while ministers of state got 19.7 per cent extra.
Unhappy senior civil servants are also to seek "clarification" about the decision, while several ministers have already privately conceded that it is proving to be "deeply unpopular".
Revealing the decision to senior officials, the Department of Finance gave no explanation for the action, sources have told The Irish Times. But one senior Cabinet minister said the Government had to take action because the public pay bill was "running way ahead".
The Minister for Finance intends to delay any special pay increases for senior grades until the next benchmarking report in 2007. In the past, Mr McCreevy believes that the Review Body's report has merely set "headline figures" for lower grades to emulate, though opponents warn that he is about to make the situation even more difficult.
The consequences of the decision have not been fully digested by senior civil servants, one source said last evening. "People are under a huge amount of pressure at the moment because everybody is trying to get things cleared away before the summer break, so people have not had the chance to focus on this."
The lengthy delay in special pay increases could encourage some officials to quit, some civil servants believe.
"People are confident about the future in a way that they might not have been then. I can't say that it will cause a brain drain, but it could deter bright young people from coming in," one senior official commented.