LABOUR TDs are bracing themselves to vote through public-sector pay cuts following the rejection of the Croke Park deal.
They are aware that they will face intense lobbying from unions to vote against any legislation to impose an across-the-board 7pc pay cut.
So far, the indications are that most TDs in the party are prepared to back Public Expenditure Minister Brendan Howlin, who is insisting that the Government will still achieve its target of €300m in "payroll" savings this year.
That means that he is going to plough ahead with cuts and reductions in premium pay.
But a Labour source said that the pay cuts legislation could lead to some disillusioned TDs quitting the parliamentary party.
It is a huge challenge for Labour, given that the party draws much of its support from public-sector workers. It has strong links to SIPTU, which rejected the deal and whose president, Jack O'Connor, has warned the Government against legislating for pay cuts.
But Labour TDs are aware that if they do not back the legislation, it could lead to the collapse of the Government and an instant general election – putting them before a hostile electorate.
There is expected to be intense lobbying within the party to reduce the level of cuts involved. The €1bn in savings from the Anglo promissory notes deal is expected to be raised as one possible way of reducing the €300m target at today's parliamentary party meeting.
Mr Howlin is also expected to be quizzed on whether he will renegotiate the deal – having previously ruled this out.
Labour Dublin South East TD Kevin Humphreys said the rejection of the Croke Park deal had been a "setback" for the Government.
Mr Humphreys said it was too early to talk about voting when no legislation had been produced.
"This is another challenge. But I'm determined by the end of our term in Government that we will have returned this country to strong growth and job creation," he said.
But rebel Labour TDs are already putting on pressure, with both party chairman Colm Keaveney and former junior minister Roisin Shortall saying that the Government had to go back to the negotiating table.
Ms Shortall said there was now a lot more leeway to reduce the €300m pay cutbacks target due to the €1bn in savings achieved in the Anglo debt deal.
"There isn't the same gun to the head. People are fed up with austerity," she said.