A £4.5 million lawsuit is being launched on behalf of hundreds of former council workers in Wolverhampton including teachers, dinner ladies and cleaners who believe they were underpaid, it emerged today.

A case on behalf of 325 disgruntled ex-workers demanding more cash under controversial equal pay legislation is being finalised by a London-based law firm. The ex-staff are seeking compensation dating back six years under the Equal Pay Act, designed to level out pay between the sexes.

The Express & Star can also today reveal the numbers of claims in Wolverhampton is the highest in the region – 225 more than Sandwell and 75 more than in Birmingham.

Wolverhampton City Council say losing the action would cripple the finances of the authority and could derail plans to bring in lower council tax rises next year.

Leigh Day & Co, the firm behind the case, claimed today negotiations with the council “got nowhere” and that it was expecting to take one group case to court over the next few months.

The council has already forked out £33 million in back pay to current and former workers to try and avoid costly legal cases, and has not put any money aside in the event of a ruling going against the city.

Michelle Landy, a paralegal adviser at the Leigh Day & Co, said: “We will be bringing one case to court on behalf of 325 different people who believe they were not paid fairly.

“The claims will go back as far as six years. We have tried to negotiate with the council, but it’s got nowhere. Poverty is no defence to a claim under equal pay. We estimate damages of £4.5 million.”

Tory councillor Wendy Thompson, cabinet member for finance, said: “We have no money for this. Our budgets are already extremely tight and very stretched delivering services like social services and highways work.

“I think these people have been encouraged by the £33 million that has already gone out in back pay – maybe they see Wolverhampton as a soft touch.”