Australia's Labor government has lost the support of the nation's 55,000 academics.

For the first time in three federal elections, the academics' industrial organisation - the National Tertiary Education Union - has decided not to fund a pro-Labor campaign in the lead-up to the poll on March 2.

The NTEU had already allocated Aus$100,000 (Pounds 50,000) towards a campaign but at a meeting last week, the union excecutive abandoned the idea. Because the government had failed to resolve satisfactorily a pay claim by academic and general staff, the union said it could not endorse the return of the Labor government.

Instead, the union will contribute Aus$20,000 assisting protests against the conservative opposition's industrial relations policies. Campus branches of the union were urged to participate in state and regional trade union protests against the policies which would eliminate the unions' role in negotiating pay and conditions for Australia's 10 million workers.

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The executive also called for industrial action in support of the pay claim, including a nationwide strike, stopwork meetings and bans on academics co-operating with the Commonwealth.

Grahame McCulloch, NTEU general secretary, said that although Labor was acting as a caretaker government, this did not alter the fact that the union had an argument with the Commonwealth and wanted to "stake out a claim now".

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"By imposing limited bans at this time, with stopworks in late March and a national strike in late April or early May, the major political parties will know there is an issue that needs their urgent attention," Mr McCulloch said.

Last August, the NTEU council voted to spend $100,000 on the election campaign - widely expected at the time to involve support for Labor. Mr McCulloch said later that the prospect of the union allocating such a sum during the election was certain to "focus the minds" of politicians on what university staff had to say. "We intend to make it clear that we have a lot of money and we will use it," he said.

The government, however, was unimpressed. In negotiations over the pay claim, it agreed to provide an additional Aus$200 million to universities over the next three years to meet the costs of a 5.6 per cent wage rise. But this was to be only a loan with the government proposing to cut annual federal grants to universities by Aus$33 million from 1999 for the next six years.

The NTEU rejected the offer and, in a rare display of solidarity, was backed by the Australian Vice Chancellors' Committee which described the plan as completely unacceptable. The "credit card pay rise" would create a dangerous precedent and would inevitably involve considerable job losses, Fay Gale, AVCC president, said.

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She said up to 5,000 staff could lose their jobs if the pay rise was granted without full government funding and that the integrity of the whole university sector was at stake.

The main parties have not yet released their education policies although Labor looks set to stand on its record - a 45 per cent increase in university enrolments since 1988 - and its budget commitments to 1998.