THE Government has started working out the detail of a contingency plan to make €300m cuts from the public sector pay bill if there is no agreement on Croke Park II.
Officials are understood to be working out the shape of the €300m, which is not expected to be in the form of a flat rate pay cut.
The likelihood is the package would contain many elements of the Croke Park II deal, such as pay cuts for those earning above €65,000, overtime and premium pay reductions and freezing of increments.
However, the cooperation of the unions would be required to make some savings, so the imposed package would not match Croke Park II item-by-item.
Government sources say the cuts would be made in as fair a way as possible.
Fine Gael is understood to be backing Public Spending Minister Brendan Howlin in his handling of the impasse with unions.
The Cabinet is expected to decide whether to unilaterally impose the cuts at its meeting next week.
"Brendan Howlin has committed to bring a course of action on Tuesday," a government source said.
Labour Relations Commission chief executive Kieran Mulvey has until Tuesday to put Croke Park II back together but State sources are sceptical that a breakthrough is possible.
"Even with the extra few days, one would have to be an optimist," a source said.
Mr Kenny last night told Fine Gael backbenchers that Mr Mulvey had been given an extra week to report back to Government.
But the matter was not discussed in detail at the Fine Gael parliamentary party meeting nor did a Labour Party meeting go into the matter extensively.
Instead, both parties are waiting for Mr Mulvey to report back next week.
The prospect of a batch of side deals being struck with individual unions to get them on board is also being mooted in union circles.
Although Croke Park II would still be rejected overall, in such a scenario, workers that did sign up to its terms would avoid being hit by direct pay cuts.
Getting unions on board would make the imposition of pay cuts on the rest easier for the Government.