CABINET ministers will consider a radical proposal to defer benchmarking payments at Wednesday's final cabinet meeting before the summer break.

There is a growing belief within government that if the benchmarking payments are not deferred, there will be a need for massive cuts in key areas of public spending.

The Taoiseach, Bertie Ahern, the main architect of the partnership process, is likely to be extremely reluctant to row back on promises given about benchmarking and would be a major stumbling block to any such move.

However, some ministers believe that the government has no choice but to review the benchmarking awards given the deterioration in the public finances.

Those ministers are backed up by figures in the book of estimates for this year which demonstrate how skewed current spending is towards the public sector pay bill.

Despite the cutbacks in key areas of spending, Minister for Finance, Charlie McCreevy will inform colleagues that day-to-day government spending will actually increase by 8% this year ? around twice the EU average.

However, the public sector wage bill is taking up a large percentage of that increase. The wage bill will rise by 10% to an estimated 12.95bn this year, the figures show.

Spending on public services, however, is forecast to increase by barely the rate of inflation.

The government has agreed to pay another 50% of the benchmarking award next year. If the agreement is honoured, it means that public pay will rise substantially again, putting further severe strain on all other areas of public expenditure. This means the cuts would exceed those introduced last year.

"Ministers and public servants have to face up to a big issue. What is job security worth? What is a good pension worth? People in the private sector are losing their jobs. This is not something that public servants have to worry about and fairness demands that we face the issue of public pay squarely in the interests of society as a whole, " said one senior official.

However, any deferring of the benchmarking awards would be greeted with fury by the public sector unions, already smarting over the Minister for Transport Seamus Brennan's decision to break-up Aer Rianta. It would also be a potentially fatal blow for the partnership process that has lasted since 1987.

As well as looking at the public pay provisions for 2004, ministers are expected to consider whether it is feasible to continue with the SSIA scheme which will involve another massive payout by the exchequer of around 500m next year to top up the interest payments of investors.

However, while there would be a strong economic logic behind a discontinuation of the SSIA scheme, politically it would be extremely unpopular. With many of the schemes are due to reach fruition around the time of the next general election, the government is unlikely to give up such a huge vote winner.