Southampton City Council has refuted trade union claims that it will shed more than a quarter of its workforce over the next three years.

The local authority has already been forced to deny accusations that it will sack any employee refusing to sign new contracts, taking effect today, that will see staff earning over £17,000 agree to a 4.5 per cent cut in pay.

Port officers employed in the city are embarking on a week-long strike today – joining hundreds of librarians, refuse collectors and street cleaners who have been involved in industrial action for the past six weeks.

Members of the Unison and Unite trade unions are currently in dispute with the Conservative-led council over the imposed pay cut and plans to make 250 roles redundant, as the town hall attempts to find budget savings of 25 per cent.

Unite now claims to have also seen a “devastating” leaked spending report, which shows that the local authority is intending to stockpile £15 million over the next three years to make more than a quarter of its 4,300-strong workforce redundant.

The union said the council was planning to make 361 posts redundant by 2012, rising to 725 the following year, culminating in a total of 1,224 job losses by 2014.

Ian Woodland, regional officer for Unite, added: “The council has deliberately misled the public into believing that their services are safe too – who on earth will be there to provide them if more than a quarter of the workforce has been sacked?”

But Southampton City Council has denied the allegations. Council leader Royston Smith told the BBC that he was unaware of the “supposed leaked document”, and disputed the union’s figures.

Smith also insisted that the town hall’s current efficiency drive would protect 400 jobs in the long-term, and that 95 per cent of staff had already signed up to the new pay-cutting employment contracts.

He maintained that technically, the council would not be sacking anyone refusing to agree to the new terms and conditions. “If they choose not to sign the contracts, they will be choosing not to work at the city council. No one will be sacked,” he said.

Smith added that 40 per cent of employees would not be subject to a pay cut, and that councillors had taken a 5.5 per cent reduction in salary from April – “the biggest of anyone in the council”.

Both sides in the dispute have called for new negotiation talks ahead of a protest march in the city this Wednesday, which will see Southampton workers stage a protest outside a meeting of the full council.