WELSH civil servants face being paid thousands of pounds less than their colleagues in southern England just because of where they live, under a new salary structure revealed last night.
More than 1,500 court workers in Wales would be the first civil servants to lose out to their English counterparts if a Government department goes ahead with the plans.
Union leaders warned that if the proposals to pay workers according to where they live are adopted across the civil service, more than 300,000 people in Wales could be affected.
They protested over the plans by the Department for Constitutional Affairs to impose a system which they said would leave workers in some areas at a disadvantage, leaving its staff in Wales languishing in the bottom two bands of a five-band system.
The Public and Commercial Services Union (PCS) said the "unprecedented" plans would lead to a "North-South divide" between southern England and the rest of the UK among staff who work in magistrates, Crown and county courts.
The starting salary for workers in Wales and northern England would be around £11,700 compared with £14,400 for employees in other parts of the country, said the union.
Officials said the proposals were "unfair and divisive" and called on ministers to intervene.
Mark Serwotka, the union's Aberdare-born general secretary, said, "These proposals are not only scandalously unfair but will entrench the North-South divide by driving down pay in some of the most deprived areas in the country.
"Civil service pay is already riddled with inequality and the fear is that with government departments seeking to drive down wages, these proposals represent the thin end of the wedge.
"We would urge ministers to intervene and put a stop to such a divisive pay system that determines your wage on where you live rather than what you do."
If the new pay structure were introduced and proved successful, unions fear the next step would be to expand regional pay practices to other government departments.
This would have a huge impact on the Welsh economy, with its heavy dependence on public sector jobs.
Jeff Evans, PCS senior national officer for Wales, said, "We think it's a highly significant development in respect of public sector pay policy and will be a major concern for the more than 300,000 Welsh public sector workers.
"One in three Welsh workers is employed either directly or indirectly by the public sector. This is the first attempt by the government and a major public body to align pay rates to the local market situation.
"The consequences to Wales are very serious because of the difference in levels of pay between Wales and the UK."
The proposals are now under consultation with union members, but union leaders have made it clear they plan to reject the offer.
Mr Evans said, "We fear the consequences not just for the DCA workers but the rest of the civil service - education workers, NHS workers and so on.
"If this comes in through the back door it could be a reality for hundreds of thousands of workers. It's very worrying and we are absolutely certain that regional pay will be piloted in the civil service this year.
"The Treasury has issued guidance to civil service departments instructing them to seriously consider the implications of regional pay, and in fact they have to explain to the Treasury if they don't introduce it."
He added, "Our feeling is that these proposals have been drawn up by London consultants and they are having to differentiate pay levels to pay people in the south-east more because of recruitment and retention difficulties.
"But by doing it this way they're taking money away from the poorest areas such as Wales and the north of England in order to subsidise the pay of the workers in the south of England."
Even within Wales pay levels will see slight regional differences with workers in Cardiff, Newport and Swansea all placed in "band four" of the five-band scale, and therefore earning slightly more than workers in the rest of the nation, who would all be placed in "band five".
Mr Evans said, "Effectively you can draw a line from East Anglia and the Midlands to the Severn and everything to the left will be in the lowest pay band with the exception of one or two hotspots which will be in the next lowest band."
A spokesman for the DCA said, "DCA's driving principles are to offer fair pay to people based on the job they do, where they do it and how well they perform.
"Regional pay reflects the reality of the job market in this country.
"If we want to attract and retain the people with the skills we need, where we need them - especially in London but also in other big cities like Manchester - we have to reward them properly."
The spokesman said there was nothing new in regional pay and said the department already pays a premium for people working in certain parts of the country, notably inner London.