Members of the RMT rail union employed on the network are said to be furious that their pay has slipped behind London Underground workers with similar duties and responsibilities. They say DLR bosses added insult to injury by reducing an insufficient' pay offer of 3.4 per cent to 3.25 per cent and refusing further negotiations.

Serco Docklands Limited (SDL), operator of the DLR, rejects the claims and says it is still in negotiations with the union to agree salary terms for 2006.

The Guardian understands the RMT will seek to cause maximum disruption by scheduling a potential walkout to coincide with the Boat Show at the ExCel Centre, which runs for nine days from January 6.

RMT general secretary Bob Crow said: "DLR pay has fallen so far behind that it would take a 29 per cent pay increase to bring pay of a DLR passenger service assistant in line with that of a Tube train operator.

"We made it clear to DLR that the serious shortfall in pay must be addressed with a substantial increase in all rates, but its response to date has been nothing short of contemptuous.

"Our members have played a key part in the growth and success of DLR and it is high time their pay reflected that contribution.

"I am confident our members will return a massive vote for action and it is now down to the company to return to the negotiating table and hammer out a realistic deal or face the prospect of effective strike action."

A spokeswoman for SDL said: "The first salary offer was stated on September 5 at the rate of inflation plus 0.5 per cent.

"This offer remains open.

"An alternative offer was presented on November 29 of a fixed 3.25 per cent increase, with the option of a second year at 3.25 per cent. SDL will seek to continue talks with the RMT at the next meeting on December 14, to resolve this issue as soon as possible."

The RMT claims its members constitute about 95 per cent of DLR staff, but SDL says only 60 per cent of staff are being balloted.

DLR operates throughout Newham and opened a new line, running from Canning Town to King George V station at North Woolwich via London City Airport, on December 6.