The government wants a smaller, more efficient fire service with job losses found through retirements, fire minister Nick Raynsford has admitted.

Mr Raynsford did not rule out redundancies to lower numbers of firefighters, but suggested many were due to retire over the next few years.

Efforts are continuing to end the dispute with firefighters, with the current stoppage now in its fifth day.

We do not believe a smaller number of firefighters is the right way forward for a modern fire service

John McGhee FBU

The Fire Brigades Union - which voted for strike action after its demands for a 40% pay rise were dismissed by the government and local authority employers - has always expressed concerns that the government wanted to cut jobs.

Mr Raynsford told the BBC: "There may well be a need for less people overall... but working in a more efficient way to ensure that cover to the public is maintained at the best possible level.

"With prospects over the next few years of substantial numbers of firefighters due to retire... I'm quite confident that any changes that need to be introduced can be done [in a way] that involves no redundancies."

Leaked documents indicate the modernisation reforms wanted by the government will cost money in the short term, with changes such as overtime adding �18m onto the wage bill.

How is it all going to be financed?

John McDonnell, Wales

Click here to send your comments

Large shortfall

Union officials fear that with almost three-quarters of the 16% pay offer currently mooted not being funded by government, extensive job losses will be needed.

They believe the �132m shortfall is equivalent to 5,280 firefighters.

Mr Raynsford also played down the possibility that "transitional funding" would be offered by the government to local authority employers to help pay for the deal while cost savings kick in.

Meanwhile, officials for Deputy Prime Minister John Prescott are meeting representatives from the firefighters' local government employers to discuss how to fund any increase in pay.

Mr Prescott will make a statement to the Commons this afternoon, but he has no plans to meet the FBU.

Tuesday's manoeuvres follow a tough statement from the prime minister on Monday in which he said the FBU's pay claims could not be met and negotiation was the only way forward.

The governor of the Bank of England Sir Edward George agreed the firefighters' pay demands were unaffordable.

Speaking on Tuesday, he warned that a "double-digit" settlement could drive up inflation and risked triggering higher pay demands across the public and private sectors.

Mr Blair has said that giving in to the FBU's pay claim would have "dire" economic consequences and any deal over 4% would have to be funded by modernisation.

His modernisation demands included sharing control centres with other emergency services, reduced night cover and full and part-time firefighters working together.

National Officer of the FBU John McGhee, told the BBC on Tuesday that modernisation has been taking place over the last 25 years, but the changes expected by the government were not practical.

A baby was saved from a fire on Monday by the armed forces

Mr McGhee said fire control operators had particular skills for the job and full and part-time firefighters already worked together.

He said reducing fire cover at night, when most of the fire deaths happen, posed a risk to the public.

He added: "Approximately 85% of the budget to fire service is spent on salaries.

"Therefore to make any significant cuts can only be through the loss of jobs and we are not prepared to put up with that."

Mr McGhee said the FBU had put forward a modernisation programme of its own.

Public service union Unison has dismissed government suggestions that firefighters should also be trained as paramedics.