The prospect of 1.5 million local government workers taking industrial action has grown after town hall chiefs refused to enhance a seven per cent three-year pay deal.

Following talks yesterday the Unison union warned it would consider taking strike action as local government employers appeared to dig in for what could be a prolonged pay battle.

The union has also launched a fresh broadside against the prime minister, calling on him to resign as a result of his "reactionary, right wing agenda".