LISBON, Portugal -- The prime minister of bailed-out Portugal is searching for alternatives to his planned pay cut for workers -- a measure that triggered massive street protests and split the coalition government.

Pedro Passos Coelho took the rare step of leading a government negotiating team that met Monday with the leaders of national business and trade union confederations, who unanimously opposed the plan.

The centre-right government is trying to generate growth as Portugal struggles with recession and a record unemployment rate of 15.7 per cent.

The government predicts the contraction will stretch into 2013 as it continues an austerity drive in return for last year's (EURO)78 billion ($101 billion) rescue.

Passos Coelho wanted to raise worker's social security contributions next year while cutting corporate taxes, but says he is ready to negotiate changes.