UNIONS threatened teacher, NHS and council strikes today after No 10 insisted that it would not fund public-sector pay rises.

The Treasury said that pay rises for NHS staff and teachers must be paid from existing budgets, following reports that pay review bodies have backed awards higher than the 2.8 per cent budgeted for by the government.

The sectors’ bodies have recommended rises of about 4 per cent for teachers and 3 per cent for NHS staff to ministers, according to the Times.