The highest earners in the public sector have been given notice by Alistair Darling that they are in line for a salary freeze next year.
The Chancellor has written to the chairs of the salary review bodies urging that there should be no pay rise for about 750,000 people including judges, senior NHS managers and GPs.
Senior civil servants are entering the final year of a three-year pay deal in 2010, but Mr Darling wants the agreement torn up given the state of the public finances.
Three-year pay deals for non-senior civil servants will be respected, but those without agreements face rises in line with the private sector - ranging between 0% and 1%.
The Armed Forces will not be affected by the move, however, in an acknowledgement of the unique circumstances currently facing the military.
The announcement is the first indication of how Labour intends to deal with public sector pay in the coming years.
Chief Secretary to the Treasury Liam Byrne said: "Britain's public services are invaluable, but if we are to halve the deficit over four years and protect frontline services we have to make tough but realistic decisions on pay.
"That means leadership from senior groups and realistic increases for other workforces."
The announcement comes as shadow chancellor George Osborne is set to make his keynote speech to the Conservative Party conference in Manchester.
