Labor Party leader Eamon Gilmore has claimed Ireland is “hurtling headlong into a period of conflict, strife and division.”

His warning came as talks resumed between government and unions on public sector pay -- and as exchequer returns for the first 10 months of the year revealed a deficit of €22.7 ($33.7) billion.

Meanwhile, two public sector union leaders, Peter McLoone of Impact and Blair Horan of the Civil Public and Services Union (CPSU), acknowledged that numbers on the state payroll may have to be cut as part of a solution to dealing with the problems of the public finances.

 But they claimed the government was determined to pursue a “single-item agenda to reduce pay” in its search for €1.3 ($1.9) billion savings. They warned against salary cuts for the lower-paid.

Horan said he simply could not countenance a situation where it was proposed to cut the pay of a frontline worker on €25,000 ($37,000) per year when someone earning over €100,000 ($148,000) or more would not have to pay additional tax.

Impact’s McLoone admitted that any alternative plan agreed between unions and the government to achieve savings would not be “painless.” But he argued the possibility still existed that the €1.3 ($1.9) billion savings could be achieved without wage cuts.

On Tuesday, Taoiseach (Prime Minister) Brian Cowen told the Dail (Parliament) that the government needs to see signs of progress this week in talks with the public sector unions.

Also on Tuesday, the Department of Finance released figures showing the deficit was €22.7 ($33.7) billion so far this year. Finance Minister Brian Lenihan told the Dail that forecasts show the overall tax take this year is back at 2003 levels.

Fine Gael leader Enda Kenny said he had warned the government on successive occasions that it was not possible to tax its way back to prosperity.

And Labor leader Gilmore chimed in with his “conflict, strife and division” warning.