The Prison Officers' Association (POA) has decided to hold a special delegate's conference later this week to decide whether or not to accept a new pay deal.
Mr McDowell wants to cut prison overtime by around €60 million per year. He has offered the POA a pay deal that would significantly alter the way they work extra hours.
The POA's national executive met this morning to discuss a number of alterations to the pay deal since it was overwhelming rejected in a ballot of 3,200 officers last April.
General secretary John Clinton said today there was a "slight shift" on the overtime issue which merited the offer being reconsidered.
No decision on whether or not to recommend the deal to its 3,200 members was reached this morning, he said. As a result around 100 delegates at Friday's conference in Dublin will now decide on holding a new national ballot.
The deadline for the offer from Mr McDowell expired yesterday. However, he extended it by 24 hours after the POA said it wanted more time to discuss a number of clarifications it received yesterday.
Mr McDowell has warned that the deal represents the final window of opportunity for officers. The dispute has resulted in around 300 meetings between Department of Justice officers and the POA, years of negotiations and the involvement of the Labour Relations Commission.
The minister has said that if the proposal is turned down, he will go ahead with his plan to privatise prison escorts and to hand the running of the country's remaining open prisons - Loughan House in Co Cavan and Shelton Abbey in Co Wicklow - to an independent agency.
Mr McDowell has also raised the possibility of getting a private company to run the replacement for Mountjoy Prison in Dublin and the new prison planned for Spike Island in Cork.
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