Rishi Sunak challenged union leaders to call off strike action after offering public sector workers pay rises of up to 7%.

The Prime Minister accepted the recommendations from pay review bodies, including 6.5% increases for teachers in England for 2023-24, which the education unions said would allow them to end their dispute with ministers.

Junior doctors, who began their longest walkout yet in England on Thursday, will receive 6% rises, along with an additional consolidated £1,250 increase.

Hospital consultants, set to strike in England next week, will receive a 6% rise.

At a Downing Street press conference Mr Sunak called on the British Medical Association (BMA) to help “make the NHS strong again” and avoid further disruption.

“The Government has not only made today’s decision on pay. We’ve backed the NHS with record funding, delivered the first ever, fully funded long-term workforce plan and met the BMA’s number one ask of Government, with a pensions tax cut worth £1 billion.

“So, we should all ask ourselves, whether union leaders – or indeed political leaders – how can it be right to continue disruptive industrial action?

“Not least because these strikes lead to tens of thousands of appointments being cancelled – every single day and waiting lists going up, not down.”

The Government has been anxious to avoid pay deals which could entrench high inflation, with Chancellor Jeremy Hunt stressing he would take “difficult but responsible decisions”.

The current level of CPI inflation is running at 8.7% and Mr Sunak – who has promised to cut it to around 5.3% by the end of the year – wants to avoid pay increases which could fuel a wage-price spiral.

In a direct message to the public sector unions, Mr Sunak said: “Today’s offer is final. There will be no more talks on pay.

“We will not negotiate again on this year’s settlements and no amount of strikes will change our decision.”

But with no new borrowing to fund deals, Mr Sunak said government departments will have to “reprioritise” spending – raising fears of cuts across public services.

The deals, based on the recommendations of the independent review bodies, include:

– A 7% rise for police officers.

– Prison officers in the operational bands will receive an increase of 7%, with larger rises for support grades and 5% for managers and governors.

– Most armed forces personnel will receive a 5% rise, plus an additional consolidated £1,000 increase, with 5.5% awards for the most senior officers.

– Senior civil servants will receive a 5.5% rise.

The 6.5% pay award for teachers will be “fully funded”, the Government said, with £525 million of additional money for schools in 2023-24 and a further £900 million in 2024-25.

The Government set out some changes to raise around £1 billion of additional money to fund the rises, including increasing the immigrant health surcharge to £1,035.

Fees will be increased across a range of immigration and nationality routes, including a rise in the cost of work and visit visas by 15%, and increasing the cost of study visas, certificates of sponsorship, wider entry clearance, leave-to-remain and priority visas among others by at least 20%.

But the bulk of the money will have to come from existing budgets.

Mr Sunak said “it’s not about cuts” but about departments “reprioritising”.

“We are asking departments to reprioritise to support public sector workers and that will mean in other areas – it’s not about cuts, it’s just about focusing on public sector workers’ pay rather than other things.

“And I’m really pleased that the teaching unions specifically have said that this pay offer is properly funded.”

He insisted “no cuts will need to be made” in schools.

The Prime Minister and Education Secretary Gillian Keegan along with the leaders of the four education unions issued a joint statement setting out how the agreement could end strike action.

The statement said: “The Government has committed that all schools will receive additional funding above what was proposed in March – building on the additional £2 billion given to schools in the Autumn Statement. The Government will also provide a hardship fund of up to £40 million to support those schools facing the greatest financial challenges.

“ASCL, NAHT, NASUWT and NEU will now put this deal to members, with a recommendation to accept the STRB (School Teachers’ Review Body) recommendation. This deal will allow teachers and school leaders to call off strike action and resume normal relations with government.”

But the Prospect union’s general secretary Mike Clancy said the Government was “taking a knife to public services to pay for these pay rises”, showing “they have learned nothing from the austerity years”.

“For a Prime Minister and Chancellor who came into office promising economic stability, the chaotic handling of this process will inspire little confidence in workers worried about their futures during the worst cost-of-living crisis in a generation,” Mr Clancy said.

Liberal Democrat leader Sir Ed Davey said: “Rishi Sunak is taking a wrecking ball to our public services with these savage cuts.

“He must come clean about the devastating impact this will have on local hospitals and schools across the country.”

For Labour, shadow Treasury chief secretary Pat McFadden questioned whether the Government will cut back on capital investment in schools and hospitals to fund the increases.

Police Federation national chairman Steve Hartshorn said the 7% rise was “a step in the right direction” but “we must not lose sight of the fact that this uplift still fails to take account of the real term cut of 17% officers have suffered since 2000”.