Amid warnings of the growing possibility of industrial action, the 1.3m strong public service union, Unison, registered its "grave concern" over the Chancellor of the Exchequer's three-year austerity package.
Gordon Brown's requirement that pay increases should be self-financing would mean deep cuts to jobs and services, according to leaders of the union's key committee dealing with Labour Party policy.
A motion drawn up yesterday to be tabled at the party's annual conference next month in Blackpool spoke of the "demoralisation" of public servants and their sense of unfairness.
Unison's strongly worded motion, which also accuses the Government of ignoring Labour's election manifesto in critical areas of policy, will ensure that the assembly will not be as submissive as party managers would have hoped.
The proposition calls on the Government to reconsider its policies on pay restraint in the public sector, especially as ministers have published a White Paper calling for the modernisation of local government.
Unison will urge ministers to recognise the "pressing and urgent need" for higher levels of public spending to ensure high quality services.
Rodney Bickerstaffe, general secretary of the union, has warned that his members will eventually resort to industrial action unless the Cabinet addresses the growing problems.
The resolution comes after a chorus of criticism of the Government from leaders of private sector unions over the need to boost manufacturing industry.
The Bank of England's monetary policy committee, which meets today to set interest rates, has been warned by the Labour Party's biggest affiliates that it has "one last chance" to prove that it recognises the importance of the manufacturing sector. Pressure on the Prime Minister to intervene over the growing plight of manufacturing industry grew last week with the announcement of the closure of the Fujitsu electronics plant in Tony Blair's Sedgefield constituency with the loss of more than 600 jobs.
t Margaret Hodge, employment minister, was yesterday accused of granting small firms a "licence to discriminate" against disabled people after she revealed plans for new legislation. The Royal National Institute for the Blind said that a law which would extend protection for disabled people from those working in companies of 20 or more, to those where the workforce was at least 15, did not go far enough. The measure will bring in another 45,000 firms and 750,00 people.