Eric Pickles has attacked the practice of trade union "pilgrims" being funded by the taxpayer as like "the last page of Animal Farm", revealing that the government is preparing a policy paper on curbing union influence in the workplace.

The communities secretary made the comments at the launch of the Trade Union Reform Campaign (TURC) at Westminster, a group backed by a dozen Tory MPs which wants to stop union reps taking taxpayers' money and using grace-and-favour facilities.

The TURC campaign is the latest step in a war being waged by mostly young Tories in the wake of revelations last year of the extent of "pilgrim" activity in the public sector.

The term arises from the row which engulfed Jane Pilgrim, who was thought to be a full-time nurse but who turned out to be doing entirely trade union activity during working hours.

At the meeting on Tuesday night it was revealed that David Cameron has asked for a report on the number of pilgrims to be prepared for him, and that Cabinet Office minister Francis Maude is preparing a policy document for the government on reducing "facility time" for union reps.

Pickles told a gathering of about 80 Tories that the revelations about pilgrims smacked of "the last page of Animal Farm" - refering to the denouement of George Orwell's novel:

No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.

Pickles told the audience: "I'd rather spend money on a teacher than someone masquerading as a teacher," and in a sign that he fully supports signals by the government that unions should sign a proposed register of lobbyists, added: "Councillors should declare prejudicial interests... it is too easy to buy political favours."

He claimed that money was being "diverted from front-line services to union activity waging class war."

On Tuesday the TUC produced a policy document claiming that union activity saved the economy £2m a day.

The TUC report Facility Time for Union Reps: Separating fact from fiction [PDF], concludes that union reps in the workplace save time and money because they lead to "more productive, and better trained, workforces, safer workplaces, and fewer cases taken to employment tribunal".

The TUC's report included affidavits from several local government employers, who say union activity makes their workforces happier and more efficient.

Tories have been sounding off against pilgrims for three months, although an attempt by backbench rising star Jesse Norman to introduce a backbench Bill outlawing Pilgrims earlier in January was rejected after almost the entire Parliamentary Labour Party turned out to vote against it.