Furious lecturers' union leaders have accused vice-chancellors of seeking to engineer an industrial dispute so they can walk out of the national pay bargaining system.
As Natfhe and the Association of University Teachers entered final talks this week, union representatives said they were "pessimistic" about reaching a deal by the deadline of 5pm on July 18, because the employers had refused to put even a preliminary offer on the table.
This left just two days to reach a deal and simultaneous agreement over the reform of pay structures.
"If you wanted to engineer an industrial dispute then this is exactly the right way to do it," said one Natfhe source. "The employers do not seem at all serious about reaching agreement and it looks like they would like to see a dispute so they can walk away from national bargaining."
The unions are gearing up for "intensive" industrial action, starting from November. Natfhe and the AUT are demanding a 28 per cent pay rise over three years, but vice-chancellors claim that last January's comprehensive spending review leaves room for nothing.
The union claim that there is money available was bolstered this week by a letter obtained by The THES that was written in June by former higher education minister Margaret Hodge to the chair of the joint pay negotiating committee.
She said: "Funding for teaching and learning will increase by 26 per cent between 2002-03 and 2005-06 from £3.9 billion to around £5 billionI Stripping out the funding for capital and specific initiatives, the amount per student per year will rise by 4 per cent in real terms."
Some union sources were expecting a "derisory" offer of less than 3 per cent this week.
On top of the pay deal, employers are also seeking agreement on fundamental changes to pay structures. Crunch issues include employers' plans to add local flexibility to the national pay framework, to introduce performance-related pay and market supplements, and to add "hurdles and hoops" (according to the unions) to academics' route up the career ladder.
Andy Pike, a national official at Natfhe, said: "If there is no agreement, we will be in dispute and have the arrangements in place for serious, intense and continuous action from November."
Malcolm Keight, assistant general secretary of the AUT, said: "We are very pessimistic given that employers are saying there is insufficient money to make the necessary pay adjustments resulting from 20 years of neglect."
Jocelyn Prudence, chief executive of Ucea, refuted the suggestion that vice-chancellors were negotiating in bad faith. "They are complex negotiations but we have been in discussions for two years over new structures, which have many positive elements. I think we have a lot of common ground with the unions and I'm optimistic that an agreement can be reached."