The college, which is the largest single provider of prison education with contracts at more than 70 institutions across the country, has reversed a previous decision to raise pay by 1.5 per cent.
Sally Hunt, general secretary of the University and College Union, said: "The decision to freeze pay is a kick in the teeth for our members and scant reward for all their hard work."
The college has had a series of clashes with the union in recent months, with a strike at Oakhill Secure Training Centre near Milton Keynes over allegations of bullying, and further industrial action at the main Manchester campus over the sacking of 15 members of staff.
Prison education already faces lower rates of pay than other parts of the further education system. Nearly 1,000 teachers signed a petition earlier this year calling for equal treatment when new contracts were handed to providers in April.
City amp; Islington College and Ealing, Hammersmith amp; West London College withdrew bids to run education programmes at three prisons after complaining that there was too little funding to pay for a high quality service.
A spokeswoman for The Manchester College said it had improved the quality of prison education in its contracts but the finances were "challenging". The college hopes talks with the Learning and Skills Council this month will result in improvements.
"Accreditation and learners' resources will, of course, be maintained," the spokeswoman said. "We want to remain the quality lead in offender learning, but can only do so if we operate from a sound financial base."