Ministers have insisted prison officers will not get a new pay award this year, after talks with union officials.
Wednesday's walkout by prison officers took ministers by surprise
Thousands of prison staff walked out on Wednesday over a decision to pay their 2.5% pay award in two stages.
Union leaders said they would not rule out strikes and expressed anger at claims staff who worked through the strike would receive a £500 bonus.
The Prison Officers' Association said the government would have a "rough time" if it gave pay awards in stages.
Prime Minister Gordon Brown has said staging public sector pay is an essential part of controlling inflation.
But both sides said talks had been "constructive".
In a joint statement, the government and the union said: "We have had some hours of constructive discussions. We will be meeting again in two weeks' time.
"The justice secretary, Jack Straw, emphasised to the POA that there can be no change in this year's pay settlement.
"The POA told him that they had no intention of further industrial action at this time, but would continue to seek a resolution to this current dispute."
However POA chairman Colin Moses said later: "We're counting nothing in and nothing out in regards to our future actions. What we are saying is that we don't believe this dispute is over."
And the union's general secretary, Brian Caton, added: "We will continue to press for no more and no less than what we should have been given by an independent pay review body appointed and selected by the government.
"And if the government continue to want to stage pay across the public services, then they'd better get ready for a rough time at the TUC, and at the Labour Party conference because we're not going to let this go."
Mr Caton also said he was "flabbergasted" to learn extra payments were to be made to those who worked during Wednesday's strike.
Mr Moses described it as an "abuse of public money".
A spokesman for the Prison Service said the bonus payment was a matter for individual governors but added that it was "perfectly appropriate" to give staff who had worked in "difficult conditions" recognition for their efforts.
The talks between the union and the government followed a surprise strike by about 20,000 prison staff in England and Wales.
The government was in court within hours seeking an injunction to stop the strike - the POA has admitted breaking a "no-strike" deal but said it was a desperate move by demoralised staff in overcrowded jails.
An independent pay review body had recommended a 2.5% pay rise, but the government staged that rise, awarding 1.5% in April and the remaining 1% from November, a decision made by the prime minister when he was still chancellor.
The union argues it reduces its value to 1.9% and effectively amounts to a second year of below-inflation pay awards.
Mr Brown said the staging of pay awards was an "essential part" of controlling inflation, keeping interest rates low and creating more jobs.
On Friday the Ministry of Justice published new predictions for the prison population over the next seven years, which suggested that the government's massive building plan for new cells will not ease the current overcrowding crisis.
Prisoner numbers reached a record 81,000 in June, prompting ministers to sanction an early release on licence scheme - as of 31 July, 3,832 prisoners had been released under licence, mostly people serving sentences of six months or less.
Of those, 126 were later recalled to prison - 41 for committing crimes.