The moves will be fiercely resisted by NATFHE, the college lecturers’ union, which today opens talks on the new annual pay round with the Colleges’ Employers’ Forum. Lecturers want a flat-rate Pounds 2,887 rise to boost the lowest paid, compensate those who lost earlier rises after refusing to sign contracts, and restore pay to the 1974 Houghton agreement levels.

But the employers are set to offer 2.7 per cent, in line with awards to schools, sixth-form colleges and the old universities. Talks are expected to reach a rapid stalemate.

The rise of PRP deals will complicate the disputes over pay and flexible contracts, now entering the third year. The deals are unlikely to influence the current talks, but there has been a surge of interest in PRP since last autumn.

Where deals have already been struck, pay rises this year look like being above the national average. Staff at Norton Radstock College in Bath already have been offered an average 4.1 per cent. College director Richard Gorringe said: “We promised staff rewards would come, and the corporation has been able to keep its word.”

He admitted, however, that difficulties could arise in a period of decline or contraction. This had been a deterrent to many colleges looking at PRP. But the CEF survey to be published next month will show a sharp increase in interest since last autumn.

Bob Kedney, CEF director of research, said: “Initially, most were schemes only for management and senior staff. But I have heard from about 50 since November, and they are talking about whole college schemes.”

But immediate prospects for a national settlement look bleak. Both sides have hardened their positions substantially.

Fawzi Ibrahim, chair of the NATFHE negotiating committee, said: “If there is a breakdown in negotiations, then there will be national action. The pay claim will add a new element in the contracts dispute.”

Initial branch returns suggest that NATFHE’s conference call for national action was more in tune with its members than was the NUT’s, which lost the call for strikes over class sizes. If negotiations fail, all members will be balloted in September.

But the employers appear also to have become entrenched. There was a concerted call from 332 college managements at five regional meetings for a continued pay freeze on lecturers who refuse to sign new contracts. Roger Ward, CEF chief executive, accused NATFHE of being “out of touch with the real world in making its claim”.

Many colleges are already introducing other measures to relate pay to performance.