University lecturers this week rejected a "full and final" 3 per cent pay increase, an improvement on the 2.5 per cent originally offered, but still lower than the offers made to teachers in schools and colleges.
David Triesman, general secretary of the Association of University Teachers, condemned the offer as "deplorable" and accused university employers of attempting to end national bargaining. He called on the government to prevent "the collapse of the pay system".
The AUT, which represents academic and related staff in old universities, has demanded that employers redress a 30 per cent pay shortfall over time.
An AUT analysis of the financial health of the sector found it to be better off than indicated. Universities generated surpluses of Pounds 184 million last year, millions ahead of forecasts, the AUT said.
Although 50 institutions were either in the red or just breaking even, the AUT said that 72 per cent of universities had a surplus.
"Every school and further education teacher in the UK will get 3.3 per cent," Mr Triesman said. "In universities, where there is broad agreement that pay has plummeted, the vice-chancellors say professional staff are worth less."
The offer includes a proposal to increase the minimum starting salary by 8.7 per cent, but again this fell short of the AUT's demands.
The AUT said that the vice-chancellors' approach was designed to destroy national bargaining.
"I support the independence of universities but I cannot believe the government can allow this collapse in the pay system," Dr Triesman said.
Philip Love, chair of the Universities and Colleges Employers Association, said that the offer was the maximum universities could afford.
"It is twice the level of the average award from the English funding council to universities," he said.
College lecturers were this week offered a pay increase of 3.3 per cent, or Pounds 330, whichever is greatest. While lecturers' union Natfhe said that the offer was far below its claim - a Pounds 2,500 flat rate increase for all lecturers - it would put the offer to its members for consultation.
If the offer is accepted, Natfhe will join forces with the Association of Colleges to ensure that colleges implement the deal.
Unison's anger at a 3 per cent pay offer for manual workers in old universities has intensified. An emergency motion for an industrial action ballot was carried at its annual higher education conference last week.