The Rail Maritime and Transport union said 5,000 signallers and other operational staff will vote on whether to launch a campaign of industrial action.

The workers have already rejected a two-year pay offer of 4.8% this year, and the rate of inflation plus 0.5% next year, which NR increased by 0.1%, said the RMT.

General secretary Bob Crow said: "The cynical offer of an extra tenth of one per cent in year one on condition that we do not ballot our members simply fails to address our members' concerns over the second year of the offer.

"Our members' verdict on the original offer was quite clear and we warned Network Rail that should it fail to table an acceptable offer on the second year of the deal we would ballot for industrial action.

"With housing costs, utility bills, pensions and food bills rising far faster than the official inflation rate the failure to improve the second year means our members are looking at a real-terms pay cut and after consulting our reps we have told the company we are in dispute.

"We have also told the company that we want a return to a common anniversary date for all operational and maintenance and infrastructure workers."

Meanwhile, last-ditch talks were being held to try to avert a dispute with thousands of NR maintenance staff in a separate row over pay.

The RMT announced earlier that its members had rejected a pay and conditions offer by a "landslide" margin of more than 100 to one.

Around 6,600 workers voted against a proposed single set of terms and conditions for maintenance staff, with just 56 in favour.