Controversial plans to reduce mileage payments for workers at Sandwell Council and save £1 million have been rubberstamped, despite threats of a walkout.

The move means the amount staff who use their  cars for work can claim will be cut from 65p to 45p per mile.

Councillors approved the decision at a meeting of the full council last night despite opposition from trade union representatives.

Workers have claimed the move amounted to “effectively a wage cut” and union leaders have threatened industrial action.

The authority had hoped to reduce the amount claimed by staff who use their cars for work, by reducing payments from 65p per mile to 40p in a bid to save £1.1 million.

In his budget last month however Chancellor George Osborne revealed “approved mileage payments” would increase to 45p per mile.

Council leader Councillor Darren Cooper agreed to adopt this figure as its new basic rate, which wiped out £100,000 of the cash the authority wished to save.

He said the rates would come in “as soon as possible” after plans were passed.

Brian Rickers, spokesman for Unite the union, said  a meeting would be held to discuss industrial action.

The council is meanwhile spending £500,000 on a new fleet of 10 electric cars, to add to its  bank of pool cars.