Lambeth Council will owe millions of pounds in back pay, once it sets equal pay structures for posts traditionally held by women.

Negotiations between the council and trade unions about the new system are still raging, despite a March 31 deadline to implement changes discussed 10 years ago.

Women workers who will benefit include cleaners, classroom assistants and school dinner ladies.

A Local Government Employers (LGE) report states authorities across the country could owe about £3billion in back pay once structures are agreed, with London councils expected to each owe an estimated £123million.

The report also estimates changes in pay structure will add two per cent to wage bills in authorities across London.

But a London Councils spokesman said at worst, the 32 councils in the capital will owe £167million, averaging £5.2million each.

He stressed the amount would differ between boroughs.

An agreement to equalise a pay gap between men and women doing similar unskilled or low-skilled jobs was made in 1997 between unions and councils. For example the unions want to see a parity of pay between dustmen and dinner ladies. But about two thirds of councils have still not brought in the changes, with only nine London boroughs implementing the new pay structures.

A council spokesman said: "The council is in regular discussions with the trade unions and these negotiations continue and we are hopeful of reaching agreement soon. In line with many other London councils, a definitive agreement cannot yet be guaranteed."

John Rogers, from Unison Lambeth said part of what was being discussed was how many years worth of back pay the council would have to pay out to long-term workers in underpaid jobs.

The council could potentially pay six years worth of back pay to these workers, raising fears the money may have to come from cutting wages or even services.

The London Councils spokesman added: "Back pay is very difficult to negotiate. Councils only have so much money - it's a delicate balancing act."

A spokesman from the Equal Opportunities Commission added: "Women have been underpaid for generations. Some have worked for local authorities for over 20 years and have been underpaid throughout. They should get what they deserve.

"It's important changes are made, because local authorities are one of the country's biggest employers of women."