Britain will push for its toughest public sector pay deal for at least 30 years by seeking a pay freeze or minimal rise for the 750,000 best paid staff on the state payroll, the Treasury said on Monday.
The government, struggling to reduce massive state borrowing, will recommend to pay review bodies there should be no salary increase in the next financial year for senior groups such as judges, top health service managers and family doctors.
It is also recommending that a three-year pay deal for senior civil servants should be reopened so they also get a zero percent increase next year.
"Britain's public servants are invaluable. But if we want to halve the deficit over four years and protect frontline services, we have to make tough but realistic decisions on pay," said Treasury Minister Liam Byrne.
The trade union representing top public sector staff expressed its disappointment at the announcement.
"It will be these senior civil servants who will be charged over the next two years with taking forward the government's very difficult programme of austerity across the public services … and this is a very poor signal indeed to them," FDA General Secretary Jonathan Baume told Sky News.
Britain's budget deficit is expected to top 12 percent of gross domestic product this year as tax receipts crumble in the worst recession in decades.
Both main political parties have pledged to get borrowing down but so far offered little concrete detail on how they will achieve it.
The Treasury announcement on pay comes just before a major speech by opposition Conservative finance spokesman George Osborne who is expected to set out the party's economic blueprint should it win an election expected next May.
"It is surprising that the Labour Chancellor chose to make this announcement – which affects hundreds of thousands of people – in the middle of a Conservative Party conference," a Conservative party spokesman said.
The Daily Mail reported former Conservative cabinet minister John Redwood, who is an economic adviser to party leader David Cameron, as saying: "It seems the government is finally realising what a mess it has made of the public finances. Everyone in the public sector has got to contribute to getting more for less as the private sector has been doing for many years."
The Treasury said it does not plan to reopen pay deals for lower paid public sector workers such as nurses and the police. But it will look again at pay for groups like prison officers and hospital doctors and recommend low increases for them of between zero and one percent.
Much public sector pay is determined by pay review bodies which take recommendations from government, unions and other parties.
The Retail Price Index measure of inflation on which many pay deals are based is currently running at a negative annual rate of minus 1.7 percent.
