Ken Cameron, general secretary of the Fire Brigade's Union, said the proposal would be the "last straw" for his members, who have already taken sporadic industrial action over cuts to staffing. Mr Cameron is seeking an urgent meeting with Jack Straw, the Home Secretary, in an attempt to reach a settlement.
The Local Government Management Board had told the union that it wants to reduce the compensation payment - which is also granted to firefighters who are permanently disabled - from five years' pay to three.
The move by management comes amid strong indications that local authorities will be unable to afford a wage increase due to firefighters without making fresh cuts.
The pay formula, which ties wages to that of skilled manual workers, is likely to yield an increase of around 5.8 per cent, but only 4.8 per cent has been allotted in the Government's Comprehensive Spending Review.
Attempts to make cutbacks in Essex sparked a prolonged campaign of 24- hour stoppages.
Union members have also expressed dismay over Home Office attempts to lower the pension entitlements of new recruits, and a management drive to decentralise negotiations on hours of work and holidays.
Mr Cameron said management proposals on compensation amounted to a "significant alteration" to firefighters conditions of service. "This would have serious financial consequences for the widows and orphans of my members who are killed on duty. Management is trying to undermine a whole range of benefits. This amounts to a time-bomb, and our members will be saying `enough is enough' if they go ahead with plans to reduce compensation. There's no doubt there will be an industrial reaction from my members."
Mr Cameron will meet members of his union on 8 October to assess their views.
Charles Nolder, of the management board, pointed out that the families of firefighters who died on duty received a lump sum worth seven years' pay - five years worth of compensation and a further two years under the pension scheme. He said management wanted to bring the entitlements in line with those received by police officers.
The board decided to lower the compensation pay-outs after it was discovered that more was being paid than was dictated by Parliament. An order would have to be laid before Parliament to legitimise the scheme, and management decided to take the opportunity to alter it.
He acknowledged that the finances of the service had been "squeezed", but argued that firefighters enjoyed one of the most generous pay and conditions packages in the public service. Mr Nolder said that the Grey Book, which dictated conditions of service, was between 30 and 40 years old and needed to be updated. He said that negotiations in the service were the most centralised in the state sector and there was a need for more local flexibility.Reuse content