Council workers have threatened a national strike if yesterday's Budget leads to an end to national public sector pay bargaining.
In his speech yesterday, the chancellor, Gordon Brown, said: "In future, remits for pay review bodies and for public sector workers will include a stronger local and regional dimension."
Speaking on the BBC Today programme Jack Dromey, national organiser of the Transport and General Workers union, said: "If the local government employers threaten national pay bargaining them the second national strike is inevitable."
Later on the programme Mr Brown insisted that national pay bargaining would continue, but he added: "What I said yesterday is that pay remits will have to take into account regional factors."
His remarks came after a cross-cutting government review of the public sector labour market revealed that public sector wages were regionally far less varied than wages in the private sector.
A Treasury statement said that details of more locally responsive public sector pay systems would be announced in the next few months.
Unions and Scottish nationalists reacted angrily to the plans.
Dave Prentis, general secretary of Britain's main public sector union, Unison, also expressed concern.
He said: "We would not be happy with a move towards regional pay and will be watching developments closely. Extra pay in one part of the country cannot be at the expense of others.
Mr Prentis added: "National pay bargaining is a transparent and fair system which is efficient and aids movement around the country. Employers already have the flexibility to adjust to local conditions. We would hope that this is not the intention, and would be opposed to any suggestion that it apply to the statutory national minimum wage."
Mr Brown's plans for regional pay come at an awkward time for Unison. Earlier this week, members of the union's health group voted to accept the government's Agenda for Change plan to modernise health service pay after it was argued that it presented the best way of protecting national pay bargaining.
The Scottish national party's shadow economy minister, Andrew Wilson, said: "It seems that Brown is looking for more money for London and the south-east at the expense of Scotland, Wales and the English regions.
"Key workers in Scotland such as nurses, policemen and firefighters should be on their guard."
Mr Wilson continued: "The proper way to proceed would be to give the Scottish parliament the financial powers required to set our own priorities in public sector pay.
Bill Speirs, general secretary of the Scottish TUC, said he was "early discussions" with the Treasury on the issue.
