By Padraic Halpin DUBLIN (Reuters) - A majority of Irish public sector workers rejected a new pay deal on Tuesday and warned the government against unilaterally cutting wages, giving it a headache as it seeks to exit an EU-IMF bailout later this year. The government and the country's main unions agreed in February to extend a three-year-old pay deal that has been credited with avoiding the kind of industrial unrest seen in other euro zone countries hit by debt woes.

By Stephen Mangan ASHBOURNE, Ireland (Reuters) - Irish Prime Minister Enda Kenny's Fine Gael party held its seat in a by-election on Thursday, but its junior coalition partner Labour was beaten into fifth place in a humiliating defeat. Labour went into government for the first time since the late 1990s two years ago on a promise to end the previous administration's adherence to "Frankfurt's Way", an austerity plan the party said was dictated by the European Central Bank.

Irish Prime Minister Enda Kenny issued a full apology Tuesday to the thousands of women who suffered in church-run laundries, two weeks after stopping short of doing so. A report published a fortnight ago investigating the involvement of the Irish state in the Magdalene laundries found that more than a quarter of the 10,000 women sent to the institutions were sent there by the state. Two weeks on, Kenny said in the Dail lower house that he wanted the government and parliament to have that time to study the report properly and reflect on its findings.

Ireland has reached a landmark deal with the European Central Bank to re-structure the massive debts of the former Anglo Irish Bank, Prime Minister Enda Kenny said on Thursday. "Today's outcome is a historic step on the road to economic recovery," Kenny told the Irish parliament. Kenny said the agreement would ensure repayments were reduced and spread over a longer period, reducing pressure on Ireland, which is struggling to recover despite an EU-IMF bailout in 2010.