The government has been warned of the possibility of renewed industrial action from unions in light of a report due to be published this week.

A Treasury review conducted by Lord Hutton, the former Labour cabinet member, is expected to recommend that nurses, teachers and council workers lose gold-plated final salary pension schemes and pay more in contributions towards retirement, making it more affordable.

Several unions representing public sector staff, including Unison, have warned of strike action to protect pensions if the chancellor presses ahead with the plans, as he is widely believed to back the predicted results of the report.

It is expected that Lord Hutton will say that final salary pension schemes need to be replaced with payments linked to the average salary; this decision will cover police, the armed forces, civil service and fire service.

This comes after news that the Association of School and College Leaders could take action to retain final salary pension schemes, marking the possibility that the organisation would strike for the first time as a collective.