TAOISEACH Enda Kenny has piled pressure on Social Protection Minister Joan Burton over her slow pace of reforming welfare.
The Coalition is at odds over what social welfare cuts are to be implemented in next week's Budget with Fine Gael believing reform will deliver savings.
But the delay in signing off on the health spending for next year is also causing frustration in Government.
The bailout for health is coming down from €600m towards €400m and will continue to be reduced.
Health Minister Dr James Reilly and a "who's who of the health service" were locked in talks with officials from the Department of Public Expenditure.
Class sizes are safe from cutbacks, however, as sources say the pupil-teacher ratio will not be affected by the Budget.
Opening the Fine Gael national conference in Limerick, Mr Kenny said social welfare needed to be reformed, and said "long-term unemployment has become a long-term problem for Ireland".
Although the spending limits have been agreed, talks will continue over the weekend on the specific measures to be implemented in health and social welfare.
At a Cabinet meeting yesterday, Mr Kenny stopped Ms Burton as she was about to list some of the cuts coming in social protection.
"She barely got three syllables out. He said to her, 'We are not going into any specific details until Sunday, Joan'," a Cabinet source said.
Most ministers are deliberately avoiding discussion about individual cuts to avoid the specifics from leaking out.
Fine Gael wants Ms Burton to put a stronger focus on improving incentives to work and ending welfare dependency. The party believes greater levels of reform can avoid cuts elsewhere.
Ms Burton is understood to be proposing measures such as cuts to allowances for pensioners and people with disabilities. The minister's efforts at tackling long-term unemployment have been criticised on numerous occasions, particularly by the troika.
Mr Kenny said last night that long-term unemployment was "very damaging for our society and is unacceptable".
"The fact is that without significant reform of the social welfare system Ireland could face a prolonged and unprecedented period of long unemployment, so changing that system is not only desirable but is inevitable and essential," he said.
The Taoiseach also said people must be locked out of "a range of welfare traps" and the Government must "break the cycle" where generations of families fall into unemployment.
He said "social employment clauses" should be introduced to show that work pays.
Mr Kenny also said anybody getting welfare benefits must engage with state services or have their payments docked.
"If people want to continue to receive benefits then they must engage with services," he said. "It's compulsory. Work must pay and be seen to pay. The vast majority of our jobseekers want to get back to work as soon as possible but because of a culture fostered by the previous government they are locked in a range of welfare traps."
A special Cabinet meeting on Budget 2014 ended with no final agreement on spending in the Department of Health. Until the health position is finalised, there is no way to ensure every other area will not be affected.
The Cabinet did not discuss specific measures, which will be dealt with at a meeting on Sunday.
Finance Minister Michael Noonan and Public Spending Minister Brendan Howlin gave an outline of the position, while it is understood Mr Kenny asked ministers to list any outstanding issues they may have had with the Budget.
- Fionnan Sheahan and Fiach Kelly