One of the country's top trade unionists has warned that a leading think-tank's calls for increasingly deeper public spending cuts would be the "single worst" thing to do.
Government advisors at the Economic and Social Research Institute (ESRI) sparked the backlash after recommending €4bn savings in Budget 2012 rather than the planned €3.6bn.
Siptu general president Jack O'Connor claimed €20bn savings in the past three years had already had a severe impact on the least well-off.
"These measures have been inflicted on people across our society with appalling consequences for the most vulnerable," he said.
The ESRI's revised strategy lowered growth forecasts, with Gross Domestic Product (GDP) this year expected to be 1.8pc down from 2pc.
In its latest quarterly bulletin, the think-tank called for an additional €400m savings through tax hikes and spending cuts and also warned that net job losses this year would hit 45,000.
Mr O'Connor said the advice was incredible coming the same week the Central Bank revealed 55,000 mortgages were 90 days in arrears - a 26pc increase in distressed loans in the last year - and the day after the worst dole statistics on record: 14.4pc unemployment and a total of 469,713 signing on.
The Siptu boss claimed the ESRI wanted tougher austerity "beyond even the draconian provisions of the EU/ECB/IMF plan, which had already inflicted so much misery on our citizens".
"Of the limited options available, intensifying austerity at this point would be the single worst thing we could do," he said.
"It would further retard our anaemic growth prospects.
"It isn't even required to appease the investors in the global financial markets who are increasingly attracted by Irish Government bonds."
Mr O'Connor said even employers' organisations would be opposed to any measures beyond the requirement to reduce the deficit by 8.6pc of GDP in the EU/ECB/IMF bailout plan by next year.
"Over the past three years, €20bn, approximately 14pc of GDP, was taken out of the economy in pursuit of a flawed budgetary strategy which has suppressed growth and retarded recovery," he said.
The Siptu chief claimed there would be no sustainable growth in Ireland unless there was investment.
"The focus now must be on jobs and growth. This is the key to recovery and it is also, incidentally, the key to building confidence in international markets," he said,
"In this regard, the real challenge facing the Government is how to find alternative sources of investment to offset the proposed €3.6bn reduction in Budget 2012, not making it worse as recommended by the ESRI."
Last month Danny McCoy, head of the employers’ body Ibec said that further austerity measures, beyond those signalled already, would be damaging to economic growth.
“The €3bn adjustment last year ended up being €6bn and there is a danger of people getting more aggressive and talking themselves into more austere measures,” he said. “There should be no austerity measures beyond the €3.6bn planned for this year.”