Danny Alexander signals Cabinet resolve over public sector pension reforms

Mr Alexander made clear that while the government was prepared to discuss the detailed implementation of the proposals, it was sticking to the broad principles which will see millions of workers having to pay more and work for longer.

Shadow chancellor Ed Balls urged the unions not to fall into the government's "trap", accusing ministers of deliberately engineering a confrontation so that they could blame the unions for the failing economy.

However, union leaders - who are threatening disruption on a scale not seen since the General Strike of 1926 - said they had to defend their members' interests in the face of the government's onslaught.

Mr Alexander's intervention came after Business Secretary Vince Cable had appeared to strike a more conciliatory tone, stressing the government's commitment to negotiation, saying "reasonable people" should be able to reach a deal.

However, Mr Alexander made clear any agreement had to be based the proposals set out in the government-commissioned review of public sector pensions carried out by former Labour Cabinet minister Lord Hutton.

"They are the basis on which we want to go forward and reform public service pensions, but of course in these discussions we need to look at the detail of how that works, about how these things are implemented," he said.

"What we have to get to is a situation where, yes, people have to work a bit longer and contribute a bit more, as we have put forward, but that we maintain the quality of their pensions."

His comments infuriated union leaders, still angry over a speech he gave on Friday, which, they said, had threatened to derail long-running negotiations to resolve the dispute.

They said that a planned one-day strike on 30 June by up to 750,000 teachers and civil servants would almost certainly be followed by further mass action in the autumn unless ministers changed course.

"This is the final straw," said Unison general secretary Dave Prentis.

"Having attacked their jobs and now to take away their pensions in the way this government is doing, it leaves them no alternative to say: 'We're going to have to take a stand.'

"If we're going to be treated with disdain in the way that we are being now, then we will move to an industrial action ballot. And it will be the biggest action since 1926 because up to ten million people will be involved."Mark Serwotka, the general secretary of the Public and Commercial Services Union, said: "If the government isn't prepared to change course in the negotiations that we are having after that strike, we will see unions representing millions more ballot for strikes in the autumn."

However, Mr Balls urged the unions not to be drawn into a conflict, saying that the public did not want a return to the "massive strikes and confrontation" of the 1980s.

"George Osborne is desperate to have that confrontation. He has been saying it for months," he said.

In an article for a Sunday newspaper, Mr Balls wrote: "George Osborne knows the economy has flat-lined over the last six months.

"He knows he's losing the economic argument on the deficit and jobs and needs to change course.

"But instead he's trying to pick a fight about pensions, provoke strikes and persuade the public to blame the stalling economy on the unions.

"That's why trade union leaders must avoid George Osborne's trap. He wants them to think that going on strike is the only option and the best way to win the argument."