The Department of Public Expenditure and Reform has warned that the protections against pay cuts and compulsory redundancies in the first Croke Park Agreement will cease if the proposals for a successor agreement are voted down by unions.
It has also confirmed that it has commenced preparing legislation to implement the reductions.
The legislation will be required even if the proposals are accepted by unions.
Earlier, speaking on RTÉ's Morning Ireland, Irish Nurses and Midwives Organisation Industrial Officer Phil Ni Sheadhgha said that if the new proposals were rejected, the first Croke Park Agreement would continue in existence until the middle of next year.
Asked about the Government legislating for pay cuts, she said this was not a financial emergency measure bill as the past two pay cuts had been and noted that public servants had already taken a 14% reduction in earnings.
In a statement, the Department of Public Expenditure and Reform said it respected and did not wish to interfere in the democratic trade union process on ratifying the proposals.
However, it rejected the INMO claims that the current Croke Park Agreement would extend to the middle of 2014, or that no pay cuts were required.
The statement says that the pay bill reduction of an additional €1bn would be required whether or not the agreement is ratified.
It states: "If the current recommendation wasn't to be ratified the current agreement would cease, along with the protections it gives, as new measures would be required."
The department says that this was "clearly communicated" to the Public Services Committee before the talks.
The department also disputes an actuarial assessment published by the 24/7 Frontline Alliance yesterday stating that employees including nurses could lose up to 11.4% of their earnings under the new Croke Park proposals.
Yesterday, the Government's chief negotiator in the Croke Park talks, Paul Reid, told the Industrial Relations Conference that management believed the average nurse would lose 1.7% net under the proposals.
Today's statement says the total pay bill for nurses last year was €2.035bn, excluding employer's PRSI.
It says the total savings generated from nurses under the new proposals is €57m - 2.8% of last year's pay bill for nurses.
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