Lecturers claim they have lost money in real terms
Lecturers are to vote on holding a national strike on pay for the first time in four years.
The Association of University Teachers has described an offer of 3.44% this year and 3% next year as "unacceptable".
The union says this is barely above inflation, whereas universities have been awarded an extra 6% in real terms for this year and next.
An overhaul of the pay system would also "water down" the national system of bargaining with more local negotiation, it claims.
'Failed to deliver'
Universities UK, which represents vice-chancellors, made the current offer in July, calling it a "positive step".
But AUT general secretary Sally Hunt said: "The employers' current proposals are unacceptable.
"They would usher in an era of under-regulated local bargaining, where a member of staff's pay would be based on where they work, not what they do."
The AUT originally demanded a 28% wage increase.
This, it said, would help overcome a 40% slide in real-terms wages during the past two decades.
It has since amended the demand to a "fair amount".
Ms Hunt added: "The AUT has negotiated with employers for two long years, but the employers have failed to deliver. They are seeking a comprehensive and detrimental change to terms and conditions.
"We much prefer to negotiate than feel forced into industrial action.
"Therefore, we ask the employers provide a mechanism to catch up the ground lost on pay, deliver shorter pay scales and maintain national pay bargaining."
The decision to hold a national strike ballot in December was reached at a meeting at the Institute of Education, in London.
AUT members have held several strikes over London weighting during the last year. The last national strike was in 1999.
Another lecturers' union, Natfhe, is recommending that its members accept the current offer, but with qualifications including inflation-proofing of pay.
Natfhe's higher education officer, Roger Kline, said: "We share some of the AUT's reservations.
"Our decision on our next step will be taken on Saturday."
The chief executive of Universities UK, Diana Warwick, said pay modernisation was "a key priority" for vice-chancellors, who hoped the AUT would join other unions in recommending the framework.
It was intended to address issues of equal pay and "build a platform" for better pay.
"There also needs to be a recognition that universities face extreme constraints in terms of the funding available to them," she said.
"Pay will form a key plank of our next spending review submission."