The Government has accepted a recommended 1% pay rise for public sector workers, including doctors and nurses, the Treasury has announced.
The awards covers more than one million employees, including staff in the armed forces.
Ministers said the award was in line with its policy of an average 1% pay increase in 2016-17.
NHS staff, doctors and dentists, and members of the armed forces will receive an average of 1%, while Prison Service staff will get 1.36% as an "exceptional award" for "highly ambitious" prison reforms.
Health union leaders said 1% was "way below" what workers needed.
Our armed forces, NHS workers and prison officers do a brilliant job serving our country but with an increasingly turbulent global economy, pay restraint continues to be a key part of our plan to finish fixing the public finances.
The independent OBR (Office for Budget Responsibility) estimates that 200,000 public sector jobs have been protected thanks to our average 1% pay policy so we can continue to deliver crucial public services.
Action is promised as a report shows only 4.4% of successful applicants to the Civil Service are from working class backgrounds.Read the full story ›
The possibility of a massive strike across the public sector could come closer when a leading trade union reveals the results of a strike ballot today.
The Unite union will announce the result of a vote by its 70,000 members who work in local government in England, Wales and Northern Ireland.
Unison and the GMB have already held ballots with their members voting in favour of industrial action over the Government's decision to limit pay rises to 1%.
Their members will take part in a one-day strike on July 10th, but the participation of Unite members would add to the challenge to the Government's policy of limiting public sector pay rises.
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Health Secretary Jeremy Hunt told ITV News 6,000 nurses could potentially lose their jobs if all health workers receive the recommended 1% pay rise.
Mr Hunt told ITV News Deputy Political Editor Chris Ship: "The reality that is if we give hospitals pay bills that they can't meet they'll only have one alternative, and that's to lay off nurses.
"The numbers show that potentially 6,000 nurses would be laid off if we accepted the pay review body's recommendations, and that's not a risk I'm prepared to take for patients."
The Health Secretary has explained the NHS 1% pay rise awarded to half of staff today is non-consolidated, which means wages will go back down at the end of the year. This is not the case for the rest of the public sector.
Deputy Political Editor Chris Ship has tweeted:
Jeremy Hunt statement says NHS 1% pay rise (for half of workers) is NON-CONSOLIDATED. So wages go back down at the end of the year
We support pay restraint, including in the NHS, but it’s unfair for NHS staff to be singled out in this way.
The Pay Review Body has looked carefully at the issue and the Government should not have rejected its advice and gone further than a one per cent cap, which the Chancellor himself announced.
If David Cameron hadn’t wasted £3 billion on a reorganisation nobody wanted, the NHS would have a much better financial outlook than it has today.
His reorganisation resulted in six-figure pay-offs for thousands of senior managers and pay cuts for nurses.
That is the reality of the NHS under David Cameron.
ITV News' Deputy Political Editor Chris Ship has tweeted:
Health Sec Jeremy Hunt says the Pay Review Body recommendation of 1% for all NHS staff was "unaffordable" & risked "quality of patient care"
Josie Irwin, from the Royal College of Nursing, told ITV News' Deputy Political Editor Chris Ship that nurses will be "very, very angry" over today's announced pay deal and would not rule out taking industrial action over the issue.
Two unions representing health workers have raised the possibility of industrial action over the government's pay award announced today.
600,000 NHS staff will not get the 1% pay rise announced this morning.
The Treasury says those staff have had wage rises due to the pay progression scheme, which recognises new skills or improved performance. It will save the Department of Health £200 million in 2014-15.
Unions say that is a "divisive" measure which shows "compete contempt" for NHS staff.
Both Unite - the country's largest union - and Unison - which represents many health workers - say they plan to consult their members and will ask if they want to consider taking industrial action.
Even the Royal College of Nursing, which does not usually take industrial action, would not rule out doing so.
The RCN told ITV News that the pay award is "incredibly divisive" and nurses will be "very, very angry."