A mediator stepped in yesterday between the government and the General Workers' Union in their tug of war over the privatisation of the shipyards and the retirement schemes offered to workers.

The unnamed mediator, who offered his presence at the talks, chaired yesterday's meeting between the two sides.

Both parties were tight-lipped on this new development, with the government saying that the mediation was aimed at finding a solution to the impasse.

The only other information that was forthcoming from the government was that if the voluntary early retirement/ resignation schemes are fine-tuned, these changes would also apply to those who have already applied and others who may apply while the talks are in progress.

The government and the GWU had reached deadlock over the shipyards' privatisation process, with the former adamant on downsizing the workforce to about 700 from the current 1,600, arguing that this would make the company more attractive to investors.

On its part, the union is calling for a better deal for workers and insisting on guaranteed employment for those who do not opt for early retirement, something the government has ruled out.

Instead, it offered to hold talks with the union to "fine-tune" the early retirement packages.

In fact, yesterday's mediation efforts were specifically geared towards tweaking the schemes.

In a statement later in the day, the Labour Party expressed its hope that the mediation efforts would be successful, in the national interest and the interest of the workers.