The Government believes there is a "very realistic possibility" of reaching a broad deal on public sector pensions by the end of the year despite Wednesday's huge strike by workers and threats of further industrial action.
Unions said the walkout was the largest since the 1979 Winter of Discontent, maintaining that up to two million workers, ranging from lollipop ladies and school cleaners to headteachers and nuclear physicists, had taken part. Talks were held yesterday between the Government and teaching unions, and today officials will meet health unions as efforts continue to reach a deal continue.
Broad agreement needs to be reached by the end of the month so the changes can be put to Parliament at the start of next year.
The Chief Secretary to the Treasury, Danny Alexander, who is leading the Government negotiations, said he believed there was a "good chance" of a deal, adding that there was still a lot of detail to be discussed.
"There is a very realistic possibility of reaching agreement," he said. "The Government is committed to achieving an agreement, as are most trade union leaders. We are working as constructively as we can on that basis."
Sally Hunt, general secretary of the University and College Union, said she had approached yesterday's talks in a "positive" way and continued to work in good faith to find a negotiated settlement. "If we cannot make progress we may need to consider further strike and other action alongside our colleagues in other unions where appropriate," she said.
The TUC general secretary, Brendan Barber, also appear conciliatory. "Uniting so many people in such strong opposition to their pension plans should give the Government pause for thought," he said. "They now need to give the negotiations real content. Unions wants to achieve a fair settlement, but it takes two to reach a deal."