The Taoiseach has incurred the wrath of the unions after signalling public pay and pensions were likely to be targeted for further cuts in December's budget.

Brian Cowen confirmed yesterday that the budget would result in cuts "right across the board", including public-sector pay and pensions.

The Fianna Fail leader was commenting after the publishing of the latest Economic and Social Research Institute (ESRI) report, which identified a 25% gap between public and private pay rates.

While, despite major budgetary shortfalls and growing debts, the Taoiseach all but ruled out any major new taxes in December's budget except for a carbon tax.

The Irish Congress of Trade Unions, which incorporates a number of the state's largest collectives, has reacted angrily to the Government's indications, saying it will organise a campaign of sustained opposition to Government's inaction on jobs, the threat of cuts to public services and to "ensure that the burden of economic adjustment is not borne disproportionately by working people and their families."

Congress General Secretary David Begg said: "Not alone has there been no action to keep people in work, but those defending their jobs have been subjected to extraordinary mistreatment and abuse.

"There are currently five serious private sector disputes in progress in which the behaviour of the employers is more in tune with practices from the early 1900s, than with a modern society.

"Our talks with Government have not produced anything. Congress therefore sees no alternative but to mobilise its membership - some 650,000 people and their families, in this jurisdiction - in a campaign of sustained opposition and in order to convince Government that fairness and social justice must be central to any proposed solution to the crisis."

A special meeting of the Congress Executive Council will be convened on September 30 in order to finalise and approve detailed proposals for the campaign, that are to be drawn up in advance by the General Purposes Committee of Congress.

(DW/BMcC)