Prof Sterling chairs the Russell Group of research-led universities

Birmingham's vice-chancellor, Professor Michael Sterling, said the offer would force many institutions into deficit and result in job losses.

A spokesman for the AUT lecturers' union said the Universities and Colleges Employers' Association had not mentioned this issue before.

The AUT and Natfhe rejected a "best and final offer" of 12.6% over three years.

The employers said the offer represented some 90% of the extra money coming in to universities when tuition fees in England rise to a maximum of �3,000 a year from this September.

The AUT said this was not correct - unless they were trying to pay for it all out of the first year's fee income.

There are going to be job losses as a result of this offer Professor Michael Sterling

Professor Sterling said the offer was "very substantial" and, while supportive of the UCEA position, he expressed concern that some universities would struggle to pay such higher wages.

"We're out of kilter with this sort of settlement," said Professor Sterling.

"It's going to hit some institutions very hard - not all are going to be in huge deficit as a result, but some will be.

"There are going to be job losses as a result of this offer. This is at the outer edge of what is affordable.

"We'll honour what has been offered, but the scope for going any further is nil."

Professor Sterling said a higher wage bill would not only lead to some academic posts being cut, but would put a stop to some poorer universities expanding their departments.

"We were hoping tuition fees would mean ratios would be better."

Students as pawns

A spokesman for the UCEA said: "We are aware that this 12.6% offer stretches many institutions to the absolute limit financially.

"The cost of the offer on the table now exceeds the unions original claim for one third of all new sector income," he said.

"Once again we call upon the academic unions to reconsider this offer and to put it to their members immediately."

Professor Sterling was also critical of the effect the action was having on students.

"In principle this action is wrong - it's using students as a pawn in the game and it's wrong."

And he expressed doubt that the deadlock between unions and the employers would be resolved imminently.

Talks

The spokesman for the AUT (Association of Univeristy Teachers) said it was not clear how much UCEA had consulted its member institutions.

"We want this to be resolved," he said.

"We need to get back around the table and start talking about it."

The unions' claim is for rises of approximately 20% over three years.

The aim is twofold: to "catch up", tackling the way academic pay has declined over the years relative to others' earnings, and to "keep up", with future rises in line with other public sector wages.