THE Government must resist public service pay demands that go beyond national programmes, or risk undermining economic progress, the president of IBEC, the employers lobby, said yesterday.

Addressing the organisation's annual business conference, Mr Tony Barry said the disciplines and framework of a succession of national programmes reflected a shared approach to many economic issues, and had helped sustain a substantial improvement in living standards and employment.

He said there were "worrying trends emerging which could, in a short span of time, turn this picture around fully.

"Public pay demands, far above what is provided for in the national programmes, are coming forward, based mainly on the settlement of the nurses dispute. These successive claims must be resisted with absolute firmness by the Government," he said.

The control of current public spending was IBEC's critical top priority.

"We are not scaremongering when we warn that the risk of drifting into a pre1987 situation is very real. The exposed sectors of our economy cannot be expected to deal with their constant, external competitive threats while Government makes concessions way above the norms of national agreements," he told the meeting.

Also addressing the conference, Mr Pat O'Neill, managing director of Avonmore, called for a better deal for major Irish companies.

"Irish indigenous industry is here to stay. And because it's here to stay, we should be getting the same treatment as other companies that are good enough to come here," he said. "Governments and state boards should take note of that permanence."

Bringing the Celtic Tiger onto the world stage held many exciting prospects, he said, and his company was already embracing the rapid change in the food sector. "But in the words of a television character from the US police series Hill Street Blues: be careful out there," he added.