The Labour Party has expressed concern over the situation at ST Microelectronics, arguing that if the government wanted to maintain industrial competitiveness, it should not create circumstances which forced the workers to seek higher wages.

The company's workers last week rejected plans for an austerity package proposed by the company as a condition for further investment. The GWU has called for fresh talks with the management before a second vote. The Prime Minister on Sunday called on the workers not to 'sabotage' the investment agreement reached between the government and the company.

PL spokesman Carmelo Abela in a statement backed the call for more talks and said he hoped the situation would be resolved in the most responsible manner in everybody's interests.

Mr Abela said the PL regretted comments by Dr Gonzi about 'sabotage' by the workers, when he had praised the same workers as a recent visit to the firm in Kirkop.

Mr Abela said the demands which the workers were making stemmed from the burdens which the government had placed on families, including the high water, electricity and gas rates. It was such decisions which were sabotaging Malta's competitiveness.

Mr Abela said that as 'half admitted' by Finance Minister Tonio Fenech, the governemnt had made a mistake when it gave the workers the impression that the company had committed itself to new investment in Malta, without saying that this was linked to the workers' acceptance of austerity measures.