Ultimatum to public sector: accept pension deal or lose it at end of year

Unions further angered by minister's warning as 2 million prepare to take industrial action

Tensions soared between unions and ministers last night as Britain braced itself for two million public sector workers to walk out on Wednesday, in the biggest show of industrial strength since the 1970s.

As the Government issued a warning that it would withdraw an improved offer if the bitter pensions dispute was not settled by the end of the year, the TUC accused it of "alienating its entire workforce". Plans for marches, pickets and protests are being finalised across the country, despite last-minute pleas from ministers for the action to be suspended. Brendan Barber, the TUC's general secretary, said it was unlikely that the strikes, which are being supported by 29 unions, would be averted.

Most schools are expected to shut for the day, some 60,000 routine operations and hospital appointments will be cancelled, council services will be closed and border controls will be thrown into disarray. Contingency arrangements for the strikes will be discussed today at a session of the government's emergency committee, Cobra.

The dispute centres on Government moves to increase the pensions contributions of most public sector staff, with each side accusing the other of failing to negotiate in good faith. They have stepped up their rhetoric in recent days, conscious that the battle for public sympathy could become an important factor in the outcome of the struggle.

Attempts to settle the dispute will resume later this week. But progress is slow because of the number of negotiations going on in parallel over individual pension schemes. There is no sign of the dispute going to arbitration.

Francis Maude, minister for the Cabinet Office, argued yesterday that most employees of private companies would give their "eye teeth" to have a pension scheme equivalent to the Government's latest "generous" offer to public sector staff two weeks ago.

"There needs to be agreement on the main elements [of the offer] by the end of this year and, if there isn't, we reserve the right to take those elements off the table," he told Sky News.

He added that there had been a low turnout to the ballots for planned action, which he said strengthened the case for new laws requiring a minimum number of union members to vote before a strike is approved. Mr Maude also confirmed that the UK Border Agency was considering drafting in the army to man border controls on Wednesday.

Mr Barber said: "The Government has managed to alienate its entire workforce. Even health service staff, who are very reluctant to strike, will be leaving their workplaces, although they have ensured proper emergency cover. Ministers must take notice of the strength of feeling of its workforce."

He also accused the Government of "deliberately misleading" workers over the impact of planned changes to their pensions, attacking ministers' claims that all those on low and middle incomes would get as good, or better, pension terms under the new scheme.

Brian Strutton, national secretary of the GMB, said: "Only a last minute breakthrough in negotiations can stop the strike, but that isn't going to happen if we are not even meeting. Increasingly wild government statements to the media while refusing to talk to us face-to-face tells its own story."

Mary Bousted, general secretary of the Association of Teachers and Lecturers, likened negotiations with the Government to "boxing in the dark".

But Conservative deputy chairman Michael Fallon hit back by accusing the unions of refusing to negotiate. He said: "It's an improved offer which we put out there, and we haven't yet had a proper response."

Shadow Chancellor Ed Balls said: "I would urge the Government to get round the table, give some ground and sort this out."