Thousands of students could have their graduations delayed

The Association of University Teachers and Natfhe have refused a proposed wage increase of 12.6% over three years.

Employers say this is "irresponsible" and that a boycott of exam and coursework marking must end.

An AUT spokesman, speaking ahead of the union's conference, said the offer was too low and had "caused a stalemate".

'Reckless behaviour'

The previous offer put forward by the Universities and Colleges Employers' Association was for a 3% pay rise this year, followed by the same in 2007.

After the latest offer, chief executive Jocelyn Prudence said: "The AUT's and Natfhe's irresponsible decision to condemn students to further disruption and uncertainty is reckless."

Talks between unions and employers broke down on Monday after the latest pay proposal was turned down.

The AUT and Natfhe have been refusing to mark exams and coursework since March unless they see a "substantial" salary increase.

The boycott could leave some final-year students unable to graduate.

Legal challenges

The AUT is also refusing to set exams. Its members will discuss what action to take at the union's annual conference in Scarborough, which starts on Wednesday.

AUT general secretary Sally Hunt said: "The employers are fiddling while Rome burns.

"Universities are facing legal challenges from their students, graduations risk being shelved and professional bodies are expressing concern over the contingency measures being considered by some institutions.

"Yet the employers still do not appear to have grasped the severity of the situation."

Roger Kline, Natfhe's head of higher education, said: "This offer seriously misjudges the mood of university academic and academic related staff.

"It is way below the settlement that independent reports say our members merit."

'Best and final offer'

The unions say members' wages have declined by 40% in real terms compared with other professionals over the past couple of decades.

They are calling for an increase in the region of 25%.

But the UCEA said 12.6% was the "best and final offer" and represented some 90% of the extra money expected when tuition fees rise to a maximum of £3,000 a year this September.

Increasing numbers of student unions are warning of disruption to this summer's final-year exams.

The National Union of Students said it was "bitterly disappointed" that talks had failed.

Crucial time

It supports the lecturers' call for better pay - but is opposing the AUT's decision not to set exams.

NUS national president Kat Fletcher said: "This is a crucial time for students who just want to be able to take the exams they have been working hard for all year."

The NUS is to send a delegation to the AUT conference and is demand an urgent meeting to discuss the action and press for exams to be set.

Ms Fletcher added: "If they had heeded our calls on this subject right from the start of the dispute, students would be facing less disruption than they are now.