He said the economics were "nonsense" because it would take money out of regional economies, with no evidence high public sector wages were crowding out private sector jobs.

LABOUR and Tory MPs have duffed up the proposals over similar fears during a debate called by Labour in the Commons.

Easington Labour MP Grahame Morris said it worsen the North-South divide, turn regions like the North East into "low wage ghettos" and result in a "brain drain".

Ian Mearns, Labour MP for Gateshead, said it would act as an "economic sedative", while his Scottish colleague Russell Brown said the idea verged on "absolute insanity'".

Tory MP Guy Opperman, who represents Hexham, tore into the "divisive and manifestly unfair" idea.

Questioning its fairness and economics, he said it would not win businesses support while local public sector workers were already doing their bit.

"We need to be a one nation coalition and our focus should not shine too brightly on London and the South East," he said.

Mr Opperman said he would not support the Government in the vote on the issue and not back the proposal if it was put forward as a policy.

But Tory Midlands MP Aidan Burley said: "This isn't a race to the bottom, it's a race to reality - the reality of what people are paid in the real world."

Cabinet Office Minister Francis Maude said was "a strong case" to look at the issue to stop private firms being crowded out and help the transfer of South East-based civil servants to regions.

But Mr Maude insisted no decisions had been made, with reports from the independent pay review bodies due shortly.

And there were no plans to scrap national pay bargaining, cutting anybody's pay or making further savings.

Labour supported the principle of regional pay when in office after introducing such arrangements for court officials, he added.

But its "opportunism" now was because of their "union paymasters who are calling the tune", claimed the Tory minister who stressed the need to tackle the national deficit.