The Cabinet met this morning to discuss spending priorities for next year, after Ministers were told they must shave 2½ per cent off this year's figures in order to rein in the public finances.
Minister for Finance Brian Lenihan has told colleagues they must make such cuts in their budgets - a task that is viewed as near impossible.
It was expected the Government would agree to delay some major projects beyond the scheduled end-date of the National Development Plan.
Speaking at the weekend, Mr Lenihan blamed the current economic difficulties on international factors.
He said the collapse in the construction industry was the only domestic factor, but that the people had "chosen" to have an era of rapidly-rising house prices.
The Cabinet meeting is set to end at about lunchtime today.
Labour leader Eamon Gilmore today claimed that Mr Lenihan is "utterly out of his depth" in his current ministerial role, however.
Speaking at Labour’s parliamentary party meeting in Clonmel, he said: “Brian Lenihan is indeed an intelligent man, and he may have had a contribution to make in the Department of Justice, but he is utterly out of his depth in the Department of Finance. And, with respect, this is no time for learning on the job.”
Mr Gilmore went on to claim that the Government was falsely blaming international factors outside of its control for the economic downturn.
“Lets be clear about it, the names behind Ireland’s economic woes are not Fanny Mae and Freddy Mac. They are Bertie Ahern and Brian Cowen."
Mr Gilmore said an average of 200 people have lost their jobs every day for the past 12 months.
“Ireland’s economy, once our national pride, and the envy of the developed world has slid from rapid growth to recession,” said Mr Gilmore. “And our public finances have overturned a surplus of €2.3 billion in 2006 into a deficit of €8.2 billion in the first eight months of this year.”
The Labour think-in will see the economic climate discussed by ESRI economist Alan Barrett and Chambers Ireland chief executive Ian Talbot. Equality Authority chief executive Niall Crowley and Age Action Ireland spokesman Eamon Timmons will also speak on equality issues and the elderly.
Additional reporting PA