A senior union leader has called on the government not to allow the minimum wage to "wither on the vine" following a report that it may be kept at £3.60 for another year.

The Times reports ministers have decided 2001 is the most likely date for the first increase in the rate of the minimum wage, which will be one year old on 1 April.

It says they have decided not to increase the rate because it is too early to assess its impact on the economy and jobs.

The youth rate, which is currently £3 an hour, will rise to £3.20 from June in line with a previous government decision.

Ministers say they have received a report within the last few days by the Low Pay Commission into the effect of the minimum wage.

The document and the Department of Trade and Industry's response are expected to be published shortly.

No decision has been taken on whether to increase the minimum wage or keep it at the present rate, a department spokeswoman said.

But trade unions, which campaigned vigorously for the minimum wage, have already reacted angrily to the reports.

Bill Morris, general secretary of the Transport and General Workers' Union, told the BBC: "Everyone who operates and manages on fixed incomes, whether we are pensioners or whether we get welfare benefits, even cabinet ministers, dare I say, expect an annual uprating.

"It seems to me having set the minimum wage at an extremely low level, a very low level indeed, to suggest there will be no uprating is sending the wrong signal.

"What it's sending is a signal which says we've done the principle but we're prepared to stand by and watch this big social change wither on the vine. I don't think we can keep silent about that."

Mr Morris said his union would be making representations to the government to have the £3.60 an hour rate increased.

He continued: "The minimum wage is one of the key tools in the government's fight against poverty.

"If we are now to abandon the uprating principle, we are abandoning the fight for a fair work place and against poverty."

Unease over the issue on the Labour backbenches has been evident for some time.

An early-day motion signed by some 60 Labour MPs before Christmas says it is now time to "substantially raise this rate," which they point out was set in July 1998.

When the minimum wage was first introduced, business leaders argued the measure risked sinking British business under a tidal wave of red tape.

But despite such fears, the UK's main employers' organisation, the CBI, found that the minimum wage has not made a significant impact on the economy.

The CBI did applaud the prudent level at which the wage was set, adding to pressure on the government to respond cautiously to demands for a raise.

John Cridland, policy director at the Confederation of British Industry said it had never been the intention that the minimum wage would rise in line with inflation.

He said: "There's no sense in which they are freezing the minimum wage, an increase in April was never on the table."

But he admitted the commission had suggested an uprating up to £3.70 from June 2000 in a previous report.

Mr Cridland continued: "The sensible thing to do, what the commission has asked to have done, is that we assess the impact, make sure we know what the impact has really been and then in future make further proposals.

"To do that on 1 April 2000, when we haven't yet got the major national economic surveys which will tell us what the impact of the initial rate was, would be foolhardy."