The news came as local government unions went out to consultation on a deal which would give their members a£4 minimum wage backdated to 1 April this year.
According to the report, there are indications that the government could set a bottom rate for pay based on the minimums decided by the wages councils, which were abolished by the Conservatives in 1993.
Wages councils set minimum rates for a range of low-paying industries such as hotels, catering and retail. If their 1993 rates were uprated in line with inflation they would give a minimum hourly wage of between£3.01 and£3.49.
A spokeswoman for the Trades Union Congress said: 'We don't have a bid figure at the moment, we are looking forward to the Low Pay Commission and will obviously be putting a bid to that, based on half male median earnings, which could produce a figure of between£3.50 to£4.20 an hour.'