CCOO union leaders have “launched preparations for an appeal for a general strike, which appears inevitable,” it said in a statement.

They “repeated their opposition to the austerity plan — unfair, unbalanced and uneconomic — and to some of the elements which are filtering out on the reform of labour rights.”

The CCOO is seeking agreement with Spain’s other main union, the UGT, which is close to the Socialist government, on a “strategy of joint action,” it said.

Unions have already called a strike by public sector workers on Tuesday over the government’s 15-billion-euro (18-billion-dollar) plan austerity package, which was narrowly approved by parliament last month.

The plan includes a five-percent pay cut for civil servants and a freeze on pensions.

The cuts are on top of a 50-billion-euro package announced in January as the government tries to put the country’s public finances in order and avoid following Greece into a debt crisis.

Zapatero’s government is trying to bring the overall public sector budget shortfall down to the eurozone limit of three percent of gross domestic product by 2013 from 11.2 percent last year.

The government is also negotiating with unions and employers over planned reforms of labour laws.

Zapatero said Wednesday that the government would approve the new measures on June 16, whether or not there was an agreement.

The planned reforms include a cut in severance pay terms and a measure to make it easier for employers to dismiss workers on permanent contracts, Spain’s RNE public radio said on Thursday.

The government would increase severance pay for those on temporary contracts to discourage their use, the radio said.

Many economists blame the high jobless rate on Spain’s two-tiered labour market, which protects those on permanent contracts with generous severance pay guarantees while those on temporary contracts have few benefits and rights.

The IMF has warned that Spain’s economy needs “far-reaching and comprehensive reforms” to its labour market and banking sector if it is to make headway on its own large debt and deficit problems.

The government, reacting to the RNE report, Friday denied there was “an official proposal” for labour reform, saying only a “working document” was being discussed.

“We must be prudent, negotiations must continue in an approriate atmosphere and without any speculation,” Deputy Prime Minister Maria Teresa Fernandez de la Vega told a news conference.

All sides “recognise it is necessary to move forward on the path of growth, stability, employment … and provide the basis for prosperity for Spain in the future.”

The Spanish economy entered recession at the end of 2008 as the global financial crisis accelerated a collapse of its property sector, and only emerged with tepid 0.1 percent growth in the first quarter this year.