Just a day after the General Workers' Union upped its tone on the shipyards' dispute, sounding warnings of street protests, the Labour Party yesterday insisted in a statement that the only way forward was through "discussion and pacific initiatives".

"The way forward for the privatisation is around a table of discussions both in the interest of workers and of taxpayers, who forked out millions for this company," the MLP said. "The only way forward is through discussion and pacific initiatives."

The statement comes in the wake of warnings by the GWU's general secretary Tony Zarb in a public meeting with shipyard workers on Wednesday that Castille belongs to the Prime Minister but the streets to the union.

More acerbically, section secretary Sammy Meilaq said workers were prepared to topple the government (nisfrundawk) if they did not get what they were asking for.

The Labour leader Joseph Muscat, along with his deputy Anġlu Farrugia were present for the meeting, leading the Nationalist press to interpret their presence as a sign that the party was against the yards' privatisation. But the party pointed out in its statement that this was a non-issue as Dr Muscat had stressed countless times in the past weeks that the party was for privatisation. "Instead of allowing these sort of lies, Lawrence Gonzi should have the courage and explain why just six months ago, before the general election, he put the minds of 'yard workers at rest regarding their employment without telling them that there would be cuts in the workforce," the statement said.

On this point, however, the government said it had never lied to the workers, stressing that it had been highlighting all along the EU's December 31 deadline until which date the government will be able to subsidise the yards.

In a statement, the government also said that downsizing means laying off workers and not reducing the workforce through voluntary schemes, as is being proposed now.

It condemned the union's attitude, criticising it for seeking confrontation when the government was constantly open to dialogue. The government questioned the premise behind the union's protest, pointing out that the government always talked with the union, whenever a meeting was requested. The last meeting with Finance Minister Tonio Fenech, it pointed out, took place just two hours after the union had asked for it.

But the Labour party also aligned itself to one of the union's primary arguments in asking why the government was insisting on downsizing the workforce before finding out what the prospective bidders wanted in terms of the amount of workers and specific skills.

By being so obstinate the government could jeopardise the privatisation process itself, the party said, arguing that it would be better for bidders to be allowed to make that choice themselves.

Here too, however, the government insisted on its position, saying that downsizing the workforce before the actual privatisation process starts was indispensible to safeguard the workers' rights.

The Finance Ministry has been arguing that no company would be interested in buying the yards with the present workforce. Moreover, closing the early retirement schemes closer to the December 31 deadline could be too late for the workforce to be reduced to suit the needs of prospective buyers.