The system for arbitrating sex discrimination cases is buckling under the sheer volume of claims, it has been reported.
Jenny Watson, chairwoman of the Equal Opportunities Commission (EOC), said the huge increase in tribunal cases against local councils was prompted by "no-win no-fee" lawyers moving into the field.
She urged ministers to consider a moratorium on all new equal-pay claims, The Times reported.
Ms Watson, who steps down as head of the EOC when it is folded into the new equality watchdog next month, warned private firms should be aware of potential action against them.
"No one should be under any illusions that this growth in individual cases will stop here," she said.
"When things move on in the public sector, no-win no-fee lawyers will be looking for new business and they are then likely to turn to the private sector.
Sex discrimination cases more than doubled between 2005 and 2006, and experts predict town halls could face an overall bill of some £3 billion in compensation.
Lawyers have seized on often unequal pay agreements for staff doing similar jobs and used the tribunals system to claim compensation and back pay.
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