The Government has said it would prefer to reach an overall deal with all trade unions representing staff in the public service on reducing the pay and pensions bill.

However, in a statement issued after today’s Cabinet meeting, the Government indicated it was prepared to enter into deals with individual unions if this is not possible.

In parallel the Government will continue preparing legislation, as a contingency measure, to allow it to unilaterally make the €300 million in savings it is seeking on public service pay and pensions this year.

The statement issued by the Department of Public Expenditure and Reform said the Government welcomed the progress made by chief executive of the Labour Relations Commission Kieran Mulvey and his team in their dealings with trade unions over recent days.

“It remains the case that the Government’s preferred option is to arrive at an overarching collective agreement in the public services,” the statement said. “To that end Mr Mulvey has been asked to continue his discussions with those unions that have yet to reach an outline agreement. The Government emphasised that it is prepared to enter into agreement with individual trade unions in the absence of an overarching collective agreement.

“As a contingency measure, given the tight timetable involved and pending the final decision of each trade union according to its own democratic mechanisms, officials of the Department of Public Expenditure and Reform will continue to prepare legislative measures in tandem with the Office of the Attorney General to achieve the required savings.”

Mr Mulvey said this afternoon 10 unions opposing Croke Park II last week are now having a change of heart.

Mr Mulvey said “significant progress” has been made in talks to date and there was now an expectation that there was now an “agreement in principle” with the unions on how to proceed. However, that was subject to the usual normal balloting process.

He said 10 unions which were opposed to the agreement last week are now “potentially looking at it afresh in a more positive disposition towards agreeing to the details that have been negotiated with them during the week”.

Mr Mulvey told RTÉ’s News At One programme said there was an imperative that an agreement must soon be reached and he warned against a “scenic tour of industrial relations”.

He said there was a definite deadline which would be extended only towards Friday. The Government wants to achieve agreement and there will be no extension of the deadline, he said. “They are very explicit on that.”

Earlier, Minister for Public Expenditure and Reform Brendan Howlin said 'significant progress' had been made in the talks.

Speaking before briefing the Cabinet, Mr Howlin said there was now an understanding in the public service that further adjustments had to be made. He said the €300 million of adjustments were necessary because the country’s finances are “still in a perilous state”.

He said the Government was under no illusions about how difficult it was to ask the public service to make a further contribution in cuts. He reiterated that he was not prescriptive about where the costs should come from and that frontline service workers might know the best route to find the savings.

He said the cuts were necessary for security of tenure of existing staff and that any cuts could come from July 1st.

The Irish Medical Organisation said that while there was no agreement with the Government on many of the critical issues facing doctors, progress had been made in the talks. The IMO said that Government had accepted its argument that significant savings in the payroll budget could be generated by transferring certain tasks such as phlebotomy from non-consultant hospital doctors to nurses.

“Together with the Government and the Irish Nurses and Midwives Organisation, we will participate in an evaluation process to quantify the scale of savings which can be achieved through this process.”

IMO director of industrial relations Steve Tweed also said that it believed that “the savings which will follow from the transfer of certain work may lead to an improved agreement on overtime”.

Among those with whom agreements have been reached in principle are the Garda representative bodies that walked out several months ago. Last night health service management offered nurses a deal that would restore double time premium rates for Sundays and public holidays in return for an increased working week from 37.5 to 39 hours.