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The draft document criticises councils' "Monday to Friday, nine-to-five" culture for being "inappropriate and outdated".

The paper, Pay and Workforce Strategy for Local Government, was written by the ODPM and the Employers' Organisation, which represents local government bosses. Its proposals include:

• scrapping benefits for weekend and "out of hours" working
  
• bringing in chief executives from outside the sector
  
• replacing the existing multiple pay grades with a smaller number
  
• more training for staff
  
• performance targets and leadership training for chief executives
  
• ODPM "regional directors" to oversee weak councils.

Employers argue that the proposals would mean more pay for the deserving and a "24/7" service for the public.

However, unions say the ideas in the paper could drive down wages and increase hours for the low paid.

The review comes as councils are being told to keep council tax rises down, and indicates that pay settlements will be less generous.

Charles Nolda, executive director of the Employers' Organisation, said: "What [the paper] doesn't mean is large pay rises across the board. It's targeted stuff, and training and education are the way forward. Pay is too crude an instrument to be the right solution."

He said employment contracts should change so that services opened when the public wanted to use them. For example, staff could work Tuesday to Saturday, but without the pay bonus usually given for Saturday work.

Heather Wakefield, head of local government at trade union Unison described the paper as "a recipe for pay chaos" and warned of the "huge burden" local pay bargaining would be.

She believed getting rid of extra remuneration for weekend work and fewer pay scales "would drive pay at the bottom end right down" and the paper's description of a "nine to five" culture as "insulting" to social care staff working nights and weekends.