Ireland’s schools remained shut, hospitals operated on skeleton staff and police joined picket lines yesterday as more than 250,000 public sector workers went on strike to protest government plans to cut their pay.

The Taoiseach Brian Cowen is preparing to unveil the country’s toughest budget in decades next month in a bid to reduce a ballooning budget deficit. The country is spending €55 billion (£50 billion) a year but only taking in €32 billion in taxes.

Civil servants, including staff at the Dáil, the Irish parliament, and prison officers, also joined the protest against Mr Cowen’s plans to slash ¤1.3 billion from the public salary purse.

The biggest beneficiaries of yesterday’s one-day strike were shopowners across the Irish border in Northern Ireland as thousands headed north, causing a five-mile tailback on the main motorway.

Mr Cowen needs to make deep spending cuts in order to stabilise the deficit at 12 per cent of gross domestic product before he can start lowering it towards the eurozone’s upper limit of 3 per cent by 2014.

However, unions want a more gradual fiscal reform lasting until 2017 and say that it should start by levying higher taxes on top earners, rather than cutting spending.

“Looking at the public finances, the figures are truly frightening,” Jim Power, the chief economist of the Irish financial services group Friends First, said. “It’s going to require . . . a huge, single-minded commitment from the Minister for Finance.”

Police officers, who are not allowed to strike, resorted to other means of protest, including refusing to issue penalty points to motorists.

Some unions called off strikes in area affected by flooding caused by heavy rain.

Hospital appointments for up to 16,000 patients were cancelled and thousands of people face delays in social security payment.

Trade union leaders claimed that the Government had forced them to strike by refusing to engage with them. A second nationwide strike is due to take place next week.

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