Staff at University College London took part in a strike earlier this year

The study said staff would be in line for a 50% increase in their London Weighting, the allowance which compensates for the city's higher living costs, if they were paid the same as those in the private sector.

Standardisation of the allowance across professions and between inner and outer London ended in 1982.

In recent months disputes over London Weighting have led to strikes by postal, council and university workers.

The report, which came out on Monday, is the first comprehensive review of London Weighting since 1974 and was undertaken by a panel appointed by the London Assembly in July 2002.

We need to regard a proper resolution to London Weighting as an investment Meg Hillier, London Assembly

Bill Knight, chairman of the panel, said: "This research shows how much inner London Weighting ought to be.

"The premium paid by the private sector to people who work in London has been consistent for years.

"Human needs are the same so it makes sense to apply the same proportionate premium for London's public services."

The effect of pay on workers, such as some London Borough employees, was studied by researchers from Warwick Institute for Employment Research.

One way of bridging the pay gap, it was argued, was to make a comparison with the private sector as all workers are coping with the extra cost of living and working in London.

The government has been urged to consider the research because ways to "even up the playing field" and stem the exodus of key experienced staff are urgently needed, the report says.

Meg Hillier, a member of the London Assembly and spokesperson on London Weighting, said: "If we want to see improvements and consistency in London's schools, hospitals and other key services, it is critical that we retain these experienced staff.

"We need to regard a proper resolution to London Weighting as an investment to ensure that this great city can continue to support the UK."