* Government says can't afford to pay more
* Union leaders to meet with gov't
By Jon Herskovitz and Peroshni Govender
JOHANNESBURG, Sept 2 (Reuters) - Striking South African state workers plan a protest march on Thursday and their leaders will meet government negotiators after rejecting a revised wage offer aimed at ending their three-week strike.
The majority of unions, most of which are in the largest labour federation COSATU, voted against the offer on Wednesday, prolonging a strike by 1.3 million state workers that a prominent economist said was costing about $150 million a day.
The strike has thrown cold water on the national euphoria over hosting the June-July football World Cup. It has shut schools, led to bodies piling up at state morgues and dampened investor sentiment.
"There are behind the scenes political discussions going on. I cannot give more details but leaders will continue to work for a solution," COSATU Secretary General Zwelinzima Vavi told Reuters.
A formal bargaining session between the unions and government officials was also planned for Thursday.
The government, which offered workers a 7.5 percent pay raise and 800 rand ($110) a month for housing, said it cannot afford to raise its offer. It will be forced to make budget cuts and seek funds to pay for what it has already put on the table.
The unions, whose state sector members include prison guards, teachers, nurses and immigration officers, have been demanding a rise of 8.6 percent, well above the 3.7 percent inflation rate, and 1,000 rand for housing.
A threatened sympathy strike by all the nearly 2 million members of COSATU-affiliated unions was temporarily put on hold on Wednesday, easing concerns about a walkout that could hurt mining and manufacturing in Africa's largest economy.
Government officials are hoping the unions can persuade rank and file members to reconsider the latest offer.
Union leaders said they would continue to consult their members, and labour sources said they felt the offer had not been properly explained to the rank and file, indicating they were trying to reverse the vote and seek approval for the offer. (Editing by Marius Bosch and Tim Pearce)