Union fury over three-year pay plan

The move sparked an angry backlash from union leaders, who warned of increasing conflict because of suspicions that ministers were trying to hold down the pay of nurses, council workers, civil servants, the police, prison officers and other public servants.

Prime Minister Gordon Brown said the "difficult" decision to stage public sector pay awards last year, which almost led to widespread industrial action, had helped "break the back" of inflation.

"To send out the best possible message about long-term inflation and about stability and to be fair to public sector workers, one way forward is a move towards long-term public sector pay settlements. While this will not be appropriate in all cases, we will be working, where relevant, with the professions to consider this option for the future," he said at his first Downing Street news conference of the year."

Chancellor Alistair Darling, who announced the new policy on BBC Radio 4, told the news conference: "We remain committed to creating a platform of stability, and will continue to do that as we have in the last year with public sector pay. Our aim is to have awards that are consistent with the achievement of the inflation target of 2%, that are affordable, but that we want to move towards a position where we have long-term pay awards.

"Because we believe they will be good for public service employees and their families, they will provide stability and certainty for the economy and departments, which have had three-year settlements for some time now, would be able to plan much more efficiently."

Union leaders attacked the Government for making such an important announcement to the media first and warned that Labour supporters could be alienated by the prospect of long-term wage deals that did not keep pace with inflation.

The GMB, which represents 300,000 public sector workers, said it "flatly rejected" the idea of a three-year pay deal. National officer Brian Strutton said: "The argument that public sector pay has to be controlled to manage down inflation is economically flawed and socially unacceptable."

The GMB said 1.5 million council workers were pressing for a one-year deal this year to catch up following recent low awards. "The reality is that Gordon Brown and Alistair Darling want to have public sector pay settled for political expediency because there will be a general election in the next three years. We are not interested in these sort of games - we have members who need good pay rises," said Mr Strutton.

Unison announced it is holding a pay summit on Thursday to draw up tactics to beat the Government's 2% pay limit this year on behalf of workers in local government, the NHS, further education, schools, transport, British Waterways, police staff and meat hygiene.