Unions this week threatened to bring universities "to a standstill" in 2006, with millions of students hit by cancelled exams and unmarked work, as pay talks collapsed into bitter recriminations.
The Association of University Teachers and sister union Natfhe confirmed this week that they would ballot members about taking combined industrial action as early as March in support of a 20 per cent pay rise over three years.
They warned that the dispute could prevent students graduating this summer and would cause chaos across the sector as the first group of students to pay £3,000 top-up fees prepare to take up their places in the autumn.
Paul Mackney, general secretary of Natfhe, said: "Disruption would be regrettable, but the claim is not only justified, it is essential. There is a need to protect the quality of our university system and the student experience. There is a window of opportunity to resolve the issue, but employers need to put forward positive proposals as soon as possible."
The two unions, which will merge formally in June, had been demanding along with the Educational Institute of Scotland that at least a third of all the extra money expected to be brought into the sector by the introduction of top-up fees should be spent on pay.
On the eve of the talks this week, they spelt out the demand, asking specifically for a 20 per cent pay increase, which would eat up about half of the new income from top-ups.
This would involve an 8 per cent rise in 2006-07, followed by 6 per cent in 2007-08 and a further 6 per cent in 2008-09, comprising both "catch-up" and "keep-up" elements linked to general public sector pay.
The unions, which represent about 70,000 university staff, said that a 20 per cent pay deal over three years would cost about £1.8 billion. New money from government grants and top-up fees would bring £3.4 billion into the sector over the next three years, they said.
Mr Mackney said: "The employers, regrettably, were unable to come up with a figure at all, or any good reason for us not to proceed with a ballot, so we will start our dispute procedure."
The Universities and Colleges Employers Association said that even though the revised and detailed pay claim had come in very late, Ucea had been willing to "negotiate positively" but had been rebuffed.
Geoffrey Copland, chairman of Ucea, said: "We were prepared to give serious positive consideration to this new claim, but unfortunately the academic unions flatly refused to engage in such negotiation, preferring to proceed with their pre-planned industrial action."
Ucea said that it had not yet decided whether to again extend the offer of talks next month, while the unions are to press ahead with a ballot, due to close at the end of February.
The AUT said on the eve of talks that action would bring universities "to a standstill". "Millions of students could be left with coursework unmarked, lectures cancelled and exam programmes thrown into chaos."
Sally Hunt, general secretary of the AUT, said: "The window of opportunity to avoid a damaging dispute has narrowed massively, and this is now deadly serious."