Southampton council’s Labour group last night split with leader Ed Miliband over support for public sector pay cuts.

The Labour leader is urging public sector workers to prepare for public sector pay cuts if they are needed to save jobs.

However, the opposition Labour group leader on Southampton City Council Cllr Richard Williams insisted: “I don’t think it’s the right way forward. I think the outcomes of that will be to demotivate staff.

"I’m quite surprised at the leader of the party. It’s certainly not where I would have thought we would have been going with this.”

He said pay freezes with “productivity improvements” were preferable.

Pay cuts of between two and 5.5 per cent were last July imposed on council workers in Southampton earning over £17,500 in a bid to save 400 jobs.

They sparked a war with unions and a summer of strikes that has yet to be resolved.

Cllr Williams said Labour’s policy in the city remained to restore pay of council workers to nationally agreed levels in “partnership with staff”, starting with the lowest first in the first budget of a Labour administration. The party is hoping to seize control from the Tories this May.

Tory council leader Royston Smith said: “We knew the action we were taking would protect jobs and we have been vindicated.

"Last week the Prime Minister endorsed our approach saying taking pay cuts to protect your colleagues in work was a sign of solidarity.

"Now the Leader of the Labour party is accepting that it is better to be in work on slightly less money than to have no job at all.”

Cllr Smith added: “It is simply impossible to protect pay, jobs and services when the council’s budget is being cut by 30 per cent and anyone who says otherwise is being dishonest.”

Mr Miliband's own local Labour-controlled council in Doncaster decided last week to cut pay by 4 per cent for staff earning £15,000 or more.