Public sector workers will have to pay an extra 3.2% towards their pension contributions after the Treasury threatened to cut Northern Ireland’s block grant by tens of millions of pounds.

The Executive agreed the decision after Treasury Secretary Danny Alexander issued a letter warning that cuts to Northern Ireland’s funding could rise to £140m a year in three years’ time.

It is understood the SDLP’s Alex Attwood was the only minister to object to the rise during an Executive meeting last month.

Finance Minister Sammy Wilson said the Executive had no option but to bring in the increase.

“We cannot stop them doing it,” he said.

“If we decide not to put the pension contributions up where are we going to find the £140m which will be reduced from our block grant from Westminster?”

Mr Attwood told ministers they should object in line with the Scottish Executive, which had dismissed the letter as threatening and not democratic. However, it has since accepted the plan.

Budget cuts and proposed changes to pensions have been listed as grievances by members of the public sector union Unison,

who were on strike yesterday. Regional secretary Patricia McKeown said “big questions are going to be asked” as a result of the pensions rise.

“Why are they promoting the idea of a cut in corporation tax which will benefit big corporations and knock almost £400m off the block grant?” she asked.

“Is it that we look after a small number of elite businesses but ignore the biggest workforce in Northern Ireland? I think big questions are going to be asked.”

Workers from across the public sector, including teachers and nurses, are being balloted over a strike on November 30.

Strike action across the UK next month could lead to the biggest industrial action in the history of Northern Ireland.

Speaking to the Belfast Telegraph last night, Mr Attwood said although he accepted the decision, he did not agree with the move to increase pension contributions across the board.

“Once the Executive makes the decision I accept that — I did not agree,” he said. “I did outline an approach to both fully-funded and non-funded schemes but the Executive decided, and I am bound by that decision.”

Factfile

The Treasury Secretary Danny Alexander was accused of sending a “threatening” letter to the Scottish government over increases in public sector pension contributions. Scotland’s First Minister Alex Salmond had asked for a delay in the move, which is due to begin in April.