The Department of Finance is expected to seek millions of euro in verifiable savings from public servants in return for some form of pay increase next year. It will outline its plans when talks between the two sides resume tomorrow.

To ensure that the discussions commence in a cordial atmosphere, union threats to escalate their action to include rolling work stoppages in hospitals, schools and government departments have been deferred until after Easter.

The current work-to-rule will continue while an overtime ban in some departments will go ahead from next week.

The talks will take place under the auspices of the chief executive of the Labour Relations Commission, Kieran Mulvey and director of conciliation, Kevin Foley.

A senior source said that, while all sides are determined to seek a resolution now rather than let it drag on, agreement would be "extremely difficult to achieve", particularly as both government and union sides are far from united in their approach.

"The unions are still angry over the way they have been treated," said the source.

Unions regard their threat to escalate their action as proof that the government had to be forced to the negotiating table.

One senior union leader said at the week-end unions are still "very wary" of talks given that they collapsed twice in the last year.