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Public sector workers in London are facing huge discrepancies in the amounts paid to them in London allowance, a report from research company IDS has discovered.

While police officers, teachers and nurses are getting payments of between £5,000 and £6,300 per year, many public sector workers are on inner London allowances of £2,000 to £3,200, despite the fact that all face high costs for housing, travel and council taxes.

In the past few years there have been significant increases in London allowances paid to certain groups of employees, with more qualified and experienced staff and those at the top of their grade being targeted for higher premiums, IDS said.

While City of London and Metropolitan police officers are at the top of the scale, with a London premium of £6,333, support workers in further education receive only £2,078 per year.

Both employers and public sector unions have criticised the lack of a coherent approach to London's higher living costs, IDS claimed.

Editor of the IDS Pay Report Sarah Miller said: "While Gordon Brown may want to limit basic pay rises in the public sector to two per cent, he needs to acknowledge that there are areas of pay reform that should be addressed whether or not there is a formal limit.

"These include the higher cost of living right across the capital. Public sector workers in London should have salaries that give them the same purchasing power as their colleagues elsewhere in the country, which is what London allowances were originally designed to provide."