Unions have warned of a "campaign of resistance" if finance minister Brian Lenihan cuts public servants' pay in this Wednesday's budget.

Speaking after the dramatic collapse of the public service pay talks, Siptu president Jack O'Connor said his preference is to await the outcome of the budget before deciding on any action.

"But if they cut pay again then the trade union movement will have to respond," O'Connor told said.

While the unions are adopting a measured response to the breakdown, with talk of strikes being played down, Peter McLoone of Impact said most unions already have a mandate for industrial action if pay rates are cut.

On the wider partnership agreement, which appears to have been dealt a fatal blow, O'Connor said if Lenihan was to deliver "a fair budget" on Wednesday, and include additional €750m worth of taxes on the wealthy, which would alleviate any pay or welfare cuts, then "it might be possible in the not-too-distant future to reconstruct some form of partnership agreement".

"But if they cut pay and welfare while insulating the wealthy, then it's all over with this government," he said.

On the detailed public service reform agenda, which was agreed and nailed down as part of the unpaid leave deal just hours before the talks collapsed, O'Connor confirmed this was now off the agenda.

The agreed reform measures included the introduction of an 8am to 8pm core working day in the health service which health managers said would allow hospitals to double the number of day procedures.

It also included an extra hour per week's work from teachers, redeployment, and a cut in overall numbers while maintaining services.

"This would have enacted the most dramatic reform of the public service since the foundation of the state. It's gone now," said O'Connor.

McLoone agreed saying it was "now inconceivable that public servants would rally to public service reform after the government had reneged on a deal and imposed pay cuts which could total as much as 15% in less than a year."

Shelia Nunan, incoming head of the primary teachers union the INTO, said the government had "thrown away a golden opportunity" for reform.

Dave Begg, secretary general of Ictu, said the move to end talks represented a "catastrophic public policy failure".

O'Connor did not blame Lenihan but "the 5% who own 40% of the country's wealth".

He was also critical of the role played by employers group Ibec in sabotaging the talks. "They succeeded in sabotaging the proposal for unpaid leave so they could secure pay cuts throughout the economy. They are dictating this divisive agenda now" said O'Connor.