* 7.5 percent wage hike agreed, will swell state spending
* Government may consider budget cuts and tax hikes
By Jon Herskovitz
JOHANNESBURG, Oct 19 (Reuters) - South African public sector unions representing about 1.3 million workers have accepted a government wage hike offer, bringing a formal end to a strike that shut school and caused chaos in hospitals, officials said.
"We have a deal. The unions that will sign from today constitute a majority," Chris Klopper, a spokesman for the Independent Labour Caucus federation, told Reuters on Tuesday.
The government offered the workers a raise of 7.5 percent, about double the inflation rate, and 800 rand ($115.70) a month for housing. Unions were seeking 8 percent and 1,000 rand.
The three-week strike through most of August cost the economy an estimated $150 million a day, damaged support for the president and led to millions of days of lost work at government offices, schools and hospitals.
It was suspended in early September with workers returning to their jobs.
The agreement relieves pressure on President Jacob Zuma and his ruling African National Congress by easing friction with the country's largest labour federation COSATU, which took part in the strike and is in a governing alliance with the ANC.
The deal will probably swell state spending by between 1 and 2 percent of the budget, putting pressure on the government to consider tax increases and budget cuts elsewhere.
The housing allowance will cost about twice as much as the government spends on environmental protection and is much more than a new plan to expand antiretroviral therapy in the country with one of the world's highest infection rates of HIV/AIDS.
The wage deal will be applied retroactively from July, union officials said. The government needed at least 50 percent of the unions representing striking workers to agree to the deal for it to go into effect. (Additional reporting by Wendell Roelf in Cape Town; editing by mark Heinrich)