A new “winter of discontent” looms as the trade unions and UK Government appear on a collision course over public sector pay with Unite’s Len McCluskey, saying he would be prepared to break the law to lead a strike.

The leader of Labour’s biggest donor insisted co-ordinated strike action across several unions was now “very likely”.

After coming under intense public and political pressure, the Government announced it was ending the seven-year public sector pay cap from next year with ministers given "flexibility" to breach the long-standing limit of one per cent on wage rises.

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Downing Street unveiled a 1.7 per cent hike for prison officers and improvements totalling two per cent in police pay for 2017/18 south of the border. The settlements will be met out of existing departmental budgets and implemented immediately.

First Minister Nicola Sturgeon has already pledged to lift the cap in Scotland.

However, the trade unions branded the Theresa May’s move “paltry” and “insulting”. Frances O’Grady, the TUC General Secretary, said it was “pathetic,” coming as inflation hit nearly three per cent.

Steven Gillan, General Secretary of the Prison Officers Union, said: “It is a pay cut. It is not acceptable. Our executive will be looking to co-ordinate action with other trade unions."

Mick Cash, leader of the Rail, Maritime and Transport union, decried the Government’s “divide and rule” approach, saying: “If it takes co-ordinated trade union action to secure a fair deal for all, then so be it."

Labour described the Prime Minister’s offer as “derisory” while Jeremy Corbyn in his keynote speech to the TUC Congress in Brighton said Mrs May was trying to “divide people on the cheap” by offering to scrap the pay cap for some but not for others. “We must be united in breaking the pay cap for all workers,” declared the Labour leader.

Mr McCluskey, when asked if co-ordinated action was very likely meant Britain was facing a new “winter of discontent,” replied: “I hope not...

“Everybody, even the Conservative Party itself, recognises the cap on public sector workers has to come to an end…I hope they lift it and allow proper negotiations to take place.

“In the event that doesn’t happen, there is a strong likelihood of co-ordinated industrial action. It will be quite widespread…There is a palpable anger running through our nation and in particular with public sector workers, who are being unjustly treated. So that anger is there and will manifest itself unless the Government takes a step back.”

On taking illegal strike action, the Unite leader urged Mrs May “not to push us outside the law,” telling Channel 4 News: “If our members are in dispute and have not reached some artificial threshold[of 50 per cent], I will support our members; if that means we are outside the law, so be it.

“If you were interviewing Nelson Mandela or Mahatma Ghandi or the suffragettes, you’d be telling them, they were breaking the law. The truth is when a law is wrong, not only is it important to stand up and say so, it is our duty to resist it.”

In response, Downing Street said: "It is irresponsible for unions to condone breaking the law."

Grahame Smith, the General Secretary of the STUC leader, denounced the Trade Union Act as “completely unfair and unjust”.

He stressed trade union members would not seek to break the law for the sake of it but noted: "If members’ interests, as they determine them, are to be advanced and that brings them into conflict with the law, then so be it.”

Mr Smith also argued that “minimal above-inflation pay rises” would not wash with public sector workers, who would feel “insulted” by them. He suggested pay rises of more than five per cent over a number of years were needed to redress the pay that had been lost.