A fresh offer aimed at resolving the long-running dispute involving nurses, ambulance staff and other NHS workers is expected to be announced later on Thursday.

Unions representing hundreds of thousands of health workers have been locked in talks all week with the Department of Health and ministers to try to break the deadlock.

It is understood that the proposed deal includes a one off payment for the current financial year, which has been at the heart of the dispute.

The Government is also expected to increase a previously suggested rise of 3.5% for the next financial year from April.

Unions will have to ballot their members before the dispute ends, and would suspend future strikes while that happens.

Unions were making no comment on Thursday.

Chancellor Jeremy Hunt told Times Radio that the Government is willing to make a “more generous offer” to public sector workers taking industrial action, as long as any settlement is not inflationary.

“We will only offer what we can afford to fund. But what we’ve said is that we are willing to make a more generous offer than was settled by the independent processes last year, providing it’s not inflationary.

“We’re working very hard to find a solution that is acceptable to the unions. I think those discussions are going very well. But nothing has been announced yet.

“And so we’re not in a position to be able to say any quantum of money involved, but are we trying to be as flexible as we can within the bounds of something that doesn’t lead to more inflation in the future? Yes, we are.”

The potential breakthrough came as strikes were held by teachers, university staff and railway workers in separate disputes over pay, jobs and conditions.

Mick Lynch, general secretary of the Rail, Maritime and Transport union, said the row which is disrupting train services is “stuck in a deadlock.”

He told the PA news agency that the latest offer aimed at stopping the strikes is “underfunded”.

Members of the RMT at 14 train operating companies are striking on Thursday, leading to some areas of the country having no rail services.

Mr Lynch said: “The Government backs up the train operating companies and gives them their mandate.

“They’ve offered a pay proposal that’s 5% for last year and 4% for the coming year, which is way below the rate of inflation.

“But they’ve said all of those pay increases such as they are, which amount to pay cuts, have got to be funded by changes to our members’ working conditions.

“So it’s a self-funded pay rise really, and that’s very difficult for us because the conditions they’re putting on that deal are just not acceptable to our people.

“So we’re stuck in a deadlock really where the offer is underfunded, the conditions are not acceptable and we haven’t got a way forward.”