Southampton City Council employees have been told that an immediate pay cut and subsequent freeze will be forced on them if necessary.
The Conservative administration has stated that it will push ahead with the cost-cutting measures despite the determined opposition of unions.
Hundreds of Unison and Unite members met on Thursday to reject the latest proposal from the council which, as well as a pay cut and scrapping of increments, includes the removal of car allowances, market supplements and reduced car mileage.
The row has centred over council’s refusal to introduce the reductions for just 12 months, rather than two years, and reinstate old terms and conditions on April 2012.
The unions had also requested a guarantee of no compulsory redundancies in return for changes to terms and conditions.
However, the council has stuck close to its original offer with a pay cut of between 2% and 5.5%, depending on earnings, and no increments for two years.
Particularly low earners would be protected under the plans, through measures such as a £250 increase in 2011-12 for those earning less than £21,000.
However, the council has offered no guarantee on what will happen to pay points after 2012-13 and it still remains possible that 285 posts - including around 40 senior management posts - could be made redundant.
In total, the council believes the changes could save as much as £8m over the next two years, part of the £65m it calculates it has to save in the next spending period.
Unison and Unite are to begin balloting staff next week over strike action while the council will decide later this month whether it will have to use the last resort tactic of dismissing and re-engaging employees opposed to the changes.
Unison branch secretary Mike Tucker said: “There is real anger amongst council workers over the bullying tactics of the Conservative councillors. Council workers who have given years of dedicated service to the City are angry over the threat of the sack unless they agree a substantial wage cut.”
However, Southampton leader Royston Smith (Con) said the council “is determined to show strong leadership in the face of a severe economic climate”. He added: “The reality is that we have significantly less money and that we cannot avoid difficult decisions.”