Councils say they have been hit hard by the recession
More than one and a half million council workers will face a pay freeze this year, unions have said.
Local authority unions in England, Wales and Northern Ireland asked for an increase of 2.5% for workers ranging from librarians to refuse collectors.
But council employers told them they would have their pay frozen instead.
Unions said workers would be unable to afford basic essentials. Employers said the freeze was to protect front-line services and help minimise job losses.
Unions said the freeze would hit 1.6 million workers, but the Local Government Association said the measures would affect 1.4 million.
Leaders of the three trade unions involved, Unison, Unite and the GMB, said they would hold urgent talks.
Heather Wakefield, of Unison, said: "The decision to cut our members' pay without negotiation is a slap in the face for hard-working council employees who have kept local communities together through the financial crisis."
Town halls have been swept by the cold winds of recession for more than a year
Local Government Employers managing director Jan Parkinson
She added that two thirds of council workers were already earning less than £18,000-a-year.
Local Government Employers managing director Jan Parkinson said: "The decision not to offer employees an increase in basic pay this year has not been taken lightly.
"Councils are facing a perfect storm of falling revenues and increasing demand for services.
"Up and down the country, councils have already been forced to cut thousands of jobs to balance the books.
"Town halls have been swept by the cold winds of recession for more than a year and that means difficult choices have to be made."
Ms Parkinson also praised "hard-working public servants" who "do a sterling job keeping services running".