An "unofficial" cap on public servants' wages has been blamed for the collapse of pay talks at the National Broadband Network.
Strike action now looms at the government-owned corporation after its bosses were ordered by public service authorities to renege on a wage offer worth 7.5 per cent over three years and slash the increase by 40 per cent.
NBN confirmed it had been ordered in February to slash its pay offer, but said it was unfazed by the threat of industrial action, saying only a minority of its workforce was affected.
The corporation has confirmed that in February the Public Service Commission killed off a deal worth 7.5 per cent, with unions alleging there was an "unofficial policy" that no government employee, except military persons, should get more than 1.5 per cent increase each year.
An NBN spokesman confirmed the 7.5 per cent offer had been rescinded because it did not comply with the government's hardline bargaining policy and said the present offer was made in mid-February.
"The deal is worth 4.5 per cent over three years," the spokesman said. "It is the strongest position we have been able to achieve."
But Dave Smith, a veteran organiser for technical union Professionals Australia, was scathing of the NBN's defence of its position.
"Our members do critical work," Mr Smith said.
"They are responsible from beginning to end of the creation, testing and eventual roll-out of the network.
"Our members, despite increasing the speed and effectiveness of the roll-out, have not received a pay rise since July 2013."