Andy Kerr, deputy general secretary of the Communication Workers' Union (CWU), said BT had been "misleading" in the way it presented some elements of a revised pay offer put forward earlier this week. Details of that proposal were delivered to the CWU on Monday evening, and were then leaked to the media the following day.
The two sides met again on Wednesday night, but failed to iron out an agreement to avoid what would be the first strike at BT in more than two decades.
Kerr said yesterday that the situation had "undoubtedly got worse" since that meeting.
"The company is now showing complete contempt for staff and for the reasonable pay rise we are seeking for our members in the company," he said.
"BT's revised offer failed to make any material improvement in pay for 2010 which we have made crystal clear is the key to resolving this dispute. While we are happy to consider a two-year deal, there must be an improvement in pay for this year."
Ballot papers will be sent to BT members on 18 June, with the result to be announced on 5 July. Industrial action would at the earliest take place seven days thereafter.
The CWU is seeking a 5 per cent rise in pay for the current year. BT originally offered a one-year deal of 2 per cent, but then revised its offer to 2 per cent this year and 3 per cent the next, plus other guarantees on employment and job security.
A spokesman for BT said the company was "astonished" by the CWU's rejection of the latest offer. "BT has moved several times over recent months but the union have remained rooted to the spot demanding a pay rise that is out of line with the current market," he said.
"Their demand for 5 per cent this year alone is simply unrealistic in the current environment."