More than 400 people - a third of the entire workforce - in departments including accounts and IT have seen their salaries axed by up to thousands as part of a national pay review.

Council leader Ken Hudson said the "winners" and "losers" could expect to win or lose to the tune of around £7,000.

The bombshell was dropped on the authority's 1,400 staff on Thursday and saw a snap walk-out among some workers which led to the authority's Contact Centre being shut early.

The review is part of a nationwide exercise to bring 'pay equality' between men and women workers and those in different departments.

Coun Hudson said the situation had been forced upon it by the government and the trade unions.

He said: "Where else could you put £2.5m into the wage structure and still upset people? The government has only given us £157,000 to carry out this evaluation, it is the taxpayers of Preston who are really footing the bill.

"I can understand people being upset, when you anticipate your salary is going up and then you receive a letter saying 'sorry, it is going down', you can understand the disappointment.

"A lot of the people who have to go down are the very good, highly-qualified staff who do not have as much contact with the public, while the winners are people like leisure centre staff."

Council chief executive Jim Carr said that the council had put a protection scheme in place to stop people losing money for the next two years with a 50% protection for the third year.

The "winners" will also have their pay increase backdated to April last year.

Mr Carr added there was the right for any worker to appeal their individual evaluation.

Unison branch secretary Emma Ayre said that any walk-out was "unofficial" and she was not aware of any organised union action.

She said: "This is an equality exercise which has been carried out because councils have not looked after pay, particularly women in low-paid jobs."

The union official added that it was still in talks with the council to bring in further changes to pay structures within the Town Hall.

Many staff who huddled in small groups outside the Town Hall after work to discuss the cuts said they were angry at how they had been treated.

One 29-year-old woman, who asked not to be named, said: "We were fuming.

"The manager gave us brown envelopes with these letters in after lunch.

"Everyone just went quiet and sat there reading them.

"There was no explanation, no nothing."

Her colleague, 28, added morale was low, saying: "The cleaners seem to have done well out of it but not the rest of us."

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