A threat by Leeds University to cut lecturers' wages if they boycott exam marking has "only hardened our resolve," their union said.
The pay deductions would take effect from Wednesday
The Association of University Teachers (AUT), which rejected an offer of a 12.6% rise over three years, staged a protest demonstration on Tuesday.
But the University vice chancellor said their action was a breach of contract.
Pay deductions would take effect from Wednesday for any member of staff failing to deliver exam marks, he said.
"I am deeply concerned and personally distressed to have to take these steps," Professor Michael Arthur added in a letter to staff.
"I have held off until now in the hope that the national negotiations would resolve the dispute, but, since that has not happened, I do not feel I can reasonably wait any longer before acting to look after the best interests of our students and the long-term interests of the university."
Salary reductions would be used by the university to ameliorate the impact on students and for the relief of student hardship, Professor Arthur said.
University staff reacted by calling a mass meeting on Tuesday lunchtime to discuss the union's response.
Local union officer Chris Pickering, said they would write to the vice chancellor demanding he withdrew his threat.
Ms Pickering said 250 members attended the protest demonstration.
"This threat has backfired," she said.