The government's hopes of resolving the bitter dispute over public sector pensions received a fresh blow today when leaders of tens of thousands of council workers rejected a final offer.

Unite's national local authority committee turned down the proposed deal, saying "genuine discussions" should be held without "arbitrary" deadlines.

The move follows a similar decision last week by the union's health executive and a decision by the British Medical Association to survey around 130,000 doctors and medical students on the offer, raising the prospect of their first industrial action ballot for more than 30 years.

The two biggest teaching unions also refused to sign up to the deal as they pressed for more talks.

Unite general secretary Len McCluskey said: "Unite's local authority representatives have lost trust after (communities and local government Secretary) Eric Pickles let the government's real agenda out of the bag.

"The security of our members in retirement is just too important to leave any space for doubt or mistrust, so the union's senior representatives in local government have rejected the government's proposals.

"Our senior representatives believe they have no choice but to reject the 'principles document' after Eric Pickles claimed the unions had made commitments which have not been fully discussed.

"There now needs to be genuine discussions without arbitrary deadlines. Our members need clarity before we can move forward."

Unite said a row before Christmas over a letter from Mr Pickles, raising the issue of an employer cost-ceiling on pension contributions, had caused a "crisis" of confidence and trust.

Leaders of the biggest public sector union, Unison, will meet tomorrow to consider the final offer, while unions will hold talks at the TUC later this week to decide their next move.

Up to two million workers went on strike in November in protest at planned changes to their pensions and some union leaders have warned of more industrial action if the row remains unresolved.