British prime minister Mr Tony Blair has dismissed claims his government "engineered" the dispute with firefighters in Britain and Northern Ireland.
Speaking at his monthly Downing Street press conference as the eight-day strike continued, he warned the Government would not be prepared to put the economy at risk by acceding to the union's demands.
Mr Blair said: "This idea, particularly at a time of heightened security and terrorist concerns, is palpably absurd. If we were to accede this pay claim, the economic consequences would be dire".
Mr Blair said the Government could not write a blank cheque authorising a 16 per cent pay deal that was not funded through modernisation. He said the deal proposed by the fire union and employers would have consisted of four pay rises over 12 months, with the unions only agreeing to "talk about modernisation".
Mr Blair said the deal would have been funded by taxpayers' money adding: "We made it clear as we have throughout that we could not sign such a cheque, especially a blank one with no costings".
The reforms proposed by Sir George Bain and supported by the Government were not "unreasonable" and would result in "basic changes" to working practices, he said.
The 50,000 firefighters' second walkout this month entered its fourth day today. About a tenth of British troops - 19,000 army, navy and airforce personnel - are replacing the firefighters when they would have been preparing for possible action against Iraq.
PA