Academics face a "painful and nasty" summer term after union leaders this week rejected a 12.6 per cent pay offer and vice-chancellors hit back with moves to dock the salaries of those taking part in industrial action.
The Association of University Teachers and sister union Natfhe warned that the sector faced "meltdown". Their boycott of student exams and assessment is set to continue through the crucial May-June exam period. Potentially, it could prevent thousands of students from graduating.
At least 19 vice-chancellors have privately told the Universities and Colleges Employers' Association that they will withhold pay from staff taking part in the action and more are expected to follow. Deductions range from 10 per cent to 100 per cent of salaries.
Ucea would not confirm the figure, but a spokesperson said: "In refusing to put the final offer to their members, the AUT and Natfhe are causing further harm to students' education. Employers have generally taken a cautious approach to withholding pay, but that may now change."
Kel Fidler, vice-chancellor of Northumbria University, confirmed that his institution would withhold 100 per cent of salary from staff who did not fulfil their full contractual obligations.
Michael Sterling, vice-chancellor of Birmingham University - the first institution to dock pay - said he was "no longer alone" in taking such action. Salary deductions have been confirmed at Sunderland, Coventry and Strathclyde universities.
The prospect of local pay deals also increased this week as St Andrews University said it would impose a 12.5 per cent deal locally after AUT branch members voted to accept the offer. But AUT Scotland's head office ruled the local ballot void, prompting students to take to the streets in protest at the threat posed to their exams.
One leading trade union official said of the UK situation: "It is going to be painful, and will be nasty. But our members are ready for the long-haul battle."
Other sources predicted that lecturers' resolve would wane as they lost income and faced the reality of action that would prevent their students from graduating or progressing.
Ucea made a "best and final" pay offer of 12.6 per cent over three years, amounting to about 4 per cent a year until 2008-09.
Ucea said that the offer would mean a senior lecturer on £38,772 getting almost £9,000 more by 2008-09 including standard annual increments. It added that the offer was in addition to an extra 3 to 5 per cent being paid this August as a result of the historic 2004 pay framework reforms. But the unions, which are demanding 23 per cent, rejected the offer. They said it amounted to less than 11 per cent, as increases were staggered.
Roger Kline, head of higher education at Natfhe, said the offer "misjudges the mood of staff".
Sally Hunt, AUT general secretary, said that some vice-chancellors had told her that they could afford more and claimed that Ucea was failing to properly represent the sector.
She has said that she would follow "other avenues" in pursuit of a national settlement, prompting concerns - hotly denied - that she might bypass the national pay structures.
Professor Sterling, chair of the Russell Group, said that Ms Hunt had contacted him about whether his members could afford a better offer and had "implied" that a separate deal with the group could be reached. But there was no explicit suggestion of a deal outside national negotiations.
He said: "The message back from my members was that the 12.6 per cent offered is already too high. There is no prospect of an improvement."
Jocelyn Prudence, Ucea's chief executive, said: "I'm surprised that just a day after national negotiating this approach was made to the Russell Group, given that union's clear policy commitment to national bargaining."
A spokesman for Ms Hunt said she had been speaking to different groups of vice-chancellors about the affordability of the pay offer to apply pressure on Ucea to return to talks with an improved deal.
She was due to tell delegates at the AUT annual conference in Scarborough this week that "the only way [the dispute] will be resolved is through a national settlement between the unions and Ucea".
phil.baty@thes.co.uk