Up to 160 firefighter posts could be axed in Sussex under controversial Government modernisation plans, according to the Fire Brigades Union.

The claim came as the FBU, employers and the Government dug in for a bitter clash over how to fund any pay deal to settle the strike.

Union leader Andy Gilchrist, angered by Government claims the union was resisting modernisation, said Downing Street suggestions that pay could be increased by cutting night shift numbers while increasing overtime would cost between 6,000 and 10,000 jobs.

The FBU said this was the equivalent of a fifth of the 50,000 national total, including as many as 85 from the 425 in East Sussex and 79 from West Sussex's 397 firefighters.

Mr Gilchrist hit back after Tony Blair said any pay increase above four per cent would have to be funded by working practice reform.

The Prime Minister said agreeing to the 16 per cent pay deal sought by the FBU would cost taxpayers up to £500 million and have "dire" consequences for the economy.

Mr Gilchrist dismissed this view, backed yesterday by Bank of England boss Sir Edward George, as "political hysteria".

He said the Prime Minister's modernisation suggestions were either already happening in the fire service or would mean investment rather than savings.

He also dismissed Mr Blair's suggestion that fewer call-outs at night meant manning levels could be lower.

"It's extraordinarily dangerous both to firefighters on duty and the people who are more exposed to the risk of fire at night than during the day."