Peter Veldon, regional organiser for the public service union Unison, said on Wednesday: “We are reasonably confident that, if talks continue in the constructive way they have so far, we will be in a position to call off the action at the beginning of the week.”

But some of Unison’s leading officials are now raising a more fundamental issue - whether Careers Scotland should be part of Scottish Enterprise, whose focus is on economic development.

The union’s members at the organisation, which has had to overcome a number of challenges since being incorporated into the enterprise structure, voted by 458 to 255 - representing 74 per cent of the 966 ballot papers issued - to take strike action in protest at the imposition of performance-related pay.

Union legislation requires the first day of action to be held on Thursday if it is to go ahead.

The union has already been taking “action short of strike action” in the long-running dispute since February, including a boycott of the performance pay process and refusal to input key careers data.

It has now abandoned the latter, which involved keying in career details of 200,000 young people and adults into Careers Scotland’s Insight system.

Scottish Enterprise had threatened to dock salaries, claiming it was a material breach of contract.

Despite claims from Scottish Enterprise, Mr Veldon said Unison does not reject performance pay in principle. “We are not in essence opposed to it: we have members in other organisations who are paid along those lines. What we object to is the particular system they have imposed on our members, which we believe to be unfair and divisive. It reflects the structure of Scottish Enterprise, which is totally unsuited to Careers Scotland.”

The union accepts that pay talks for 2005 are “done and dusted”, after careers staff had performance-based pay put into their bank accounts in July. Increases ranged from 1.75 per cent to 5 per cent, averaging at 3.5 per cent.

Careers Scotland points out that the new system has benefited lower earners, addressing a long-standing Unison grievance. A third of staff at every grade received increases of 7 per cent, as did a third of those in the administration, management and executive grades.

Talks this week have therefore centred on next year’s approach. Unison is pressing for a “hybrid” system which will include some form of performance pay but also a basic increase for all staff.

Scottish Enterprise has told Unison it is willing to look at how the new system is implemented, but will not depart from the principle of performance pay which it has used for 10 years. The agency says that it has offered a number of olive branches, such as deferring the introduction of the new scheme by a year and “incremental progression”, which was at the heart of this week’s negotiations.

The unhappiness of Careers Scotland staff with performance pay surfaced publicly last November after a Unison survey found its members were demoralised and had largely lost confidence in the agency’s management.

By contrast, a study published earlier this year by Tony Watts, professor of career development at Derby University, painted a glowing account of an operation which was “comparable to leading good practice across the world”, and had achieved impressive progress in a little over two years.

The dispute has not affected careers staff in the Highlands and Islands Enterprise area, where only pay bonuses so far have a performance element.