The proposal is the first direct challenge to the Treasury's warning that it wants a tough line on public sector pay.
A circular to branches from head of local government Keith Sonnet last week said the union should concentrate solely on pay following the single status agreement. National committees for manual, craft and white-collar staff are recommending a claim of£500 or 5%, whichever is greater, and a minimum rate of£4.61 an hour.
Next year's negotiations, the first under single status, will cover 1.4 million staff.
Mr Sonnet said the proposed increase was 'fairly modest' given that the inflation rate had been rising and earnings in general had gone up by as much as 4.5%.
'It's higher than what we got last year with some underpinning to help the lower paid. We need a settlement which is of that order,' he said.
The single status deal struck earlier this year, which harmonises conditions for manual and white collar staff, set a minimum wage of£4 an hour. A discussion paper released with the circular said council pay still fell short of the union's target of a minimum rate based on half male median earnings.
Based on last months' data, that figure would be£4.61, equating to a minimum of£9,374 a year for staff on a 39-hour week or£8,874 for those working 37 hours. There were half a million council workers earning less, mostly part-time women, and the boosted minimum would mean a 9.37% rise for those affected.
The paper acknowledges that the claim would be hard to achieve and would need full membership support with a forceful campaign.
Both the Local Government Association and Convention of Scottish Local Authorities have estimated budget shortfalls. 'It is already clear that the financial settlement for 1998-99 will hit the local government employers hard . . . In this climate - and with ministers still taking a tough line on public sector pay - it is inevitable that councils will have very little room for manoeuvre,' the paper says.
The stance taken by public sector pay review bodies early next year is also expected to have a strong bearing. The government wants low awards, and has said no extra funding for pay will be made available.
Branches have been asked to respond by mid-November, and the NJC will formalise its position around the end of the year. Negotiations start early next year. The T&G and GMB are yet to make a recommendation to members.