A deal on pensions for UK public sector workers reached last month by the government may be in doubt, despite assurances that the deal would not be torn up.

Last month, the government reached a deal with trade unions to raise the public sector retirement age for new employees from 60 to 65, in line with the retirement age for the private sector, although existing workers would still retire at 60.

However, the Pension Commission report due out next week is expected to recommend increasing the pension age to 67, and the director of the CBI David Frost has called for the issue to be re-examined. Mr Frost told the BBC: What we are going to end up with here is two nations. That will create real resentment in the workforce.

A spokesman for Prime Minister Tony Blair added: We believe it’s better to stick to agreements rather than tear them up within a month.

Meanwhile, speaking on behalf of trade unions, TUC general secretary Brendan Barber hit back , saying: Industrial relations depend crucially on trust. Agreements must be honored.