Tony Blair has warned firefighters that the government will not give in to strike threats over a 40 per cent pay claim.

Praising the firefighters, who "do a very, very good job", the prime minister cautioned that "no government" could meet their demand for a minimum wage of £30,000.

"No government, no government could agree a 40 per cent wage claim.," he said.

"I don't think there is anybody who can believe that we could give a 40 per cent wage claim without terrible damage to the economy."

Blair also indicated that other public sector workers must keep salary aspirations in check.

"The first thing that would happen is that the Bank of England would start putting people's mortgages up," he said.

"You know there's the firefighters but there is also the teachers, the nurses and other local government workers. It would be lovely to be able to pay everybody as much as they wanted, " he said.

And he threw his weight behind an independent pay review for firefighters.

"What we have done in a effort to be reasonable is to say, look, why don't we have an independent inquiry. Because after all the fire fighters have got their own pay formula which has worked very well, and they have admitted that it has worked very well over many years precisely to avoid disputes like this.

"I think if we offer that, I can't really think it will be justified to take industrial action."

Council bosses have welcomed government intervention in the pay dispute.

After talks aimed at averting the strike action collapsed on Monday, local government minister Nick Raynsford has recommended that an independent pay review body be established.

The stalemate came after hundreds of firefighters lobbied parliament in a bid to win MPs' support for their wage claim.

Local government leaders have rejected the pay demand - offering the union a tenth of what firefighters are demanding, a four per cent pay increase.

The Fire Brigades Union (FBU) entered 11th hour negotiations with local government chiefs - although the talks ended without agreement soon after 3.00pm on Monday.

The union has warned the government that it will now ballot its members on strike action.

Andy Gilchrist, the FBU general secretary, said the union will hold a special conference on September 12 "and will be recommending that we ballot our members for National Strike Action".

He rejected Raynsford's recommendation.

"Our members are clear that they deserve the going rate for the job they do, which is £30,000 and we are therefore not going to get caught up in a so-called independent governmental review," he said.

"If the government had stayed out of these negotiations from the start, we would not be in the situation we now find ourselves, with our members facing a possible ballot for strike action."

But local government chiefs warned that the pay demand is unrealistic.

They agree that the current salary of £21,531 per year should be increased, but dismiss the suggestion that this should rise by nearly 50 per cent.

Local Government Association chairman Sir Jeremy Beecham said the claim "does not say much for the union's sense of reality".

The LGA's Charles Nolda said a strike could cost innocent lives.

"We do not believe that anyone would wish to strike, thereby putting lives in jeopardy," he said.

"There is an opportunity for a fair and independent inquiry to resolve the issue. We hope that the FBU will now reconsider and withdraw their threat to strike."

Councillor Ted George, the chairman of the Fire Employers negotiating team, said: "It is extremely disappointing that there has been no agreement today.

"But there is no need for the union to escalate our disagreement into a life threatening strike. There is a way to resolve the situation without putting the public in the middle.

"The union prefer to only talk about their 39-50 per cent pay claim, which we cannot afford. With inflation running at just 1.5 per cent such a claim is unrealistic.

"Their headlong rush to a strike ballot could turn a resolvable disagreement into real risks for the safety of the public."

Eric Pickles, the shadow local government secretary, has called on ministers to intervene in the dispute.

"If the pay talks fail today then the risk of union strike action is likely with the community being placed at risk," he warned.

"To avoid strike action John Prescott should immediately set up a review into the pay and working conditions of working firefighters. It is clear that the current pay formula is outdated and we need both pay and working conditions to reflect a modern fire service.

"In the meantime I call for the Fire Brigades Union to be realistic and accept the reasonable offer of the employers as an interim measure."