Chancellor Alistair Darling issued a call for pay restraint when he addressed the TUC Congress in Brighton.

Mr Darling also poured cold water on union hopes for a windfall tax on energy companies to pay for help for those struggling with soaring fuel bills.

His speech was greeted with a few seconds of polite applause, while some delegates held up banners or wore T-shirts critical of the Government.

Union leaders lined up afterwards to express their disappointment with the speech, saying they were "underwhelmed" and complaining there was little comfort for millions of families struggling to make ends meet.

Mr Darling said he believed Britain could "get through" the current economic difficulties as long as it did not sacrifice stability by allowing inflation to get out of hand.

He told union leaders they were right to be concerned about "excessive" bonuses in the boardroom but said pay rises for ordinary workers must be consistent with the Government's 2 per cent inflation target - a policy which sparked a series of strikes this year in the public sector and could lead to further action in the coming months.

Mr Darling said: "It would be so damaging for us to allow inflation to become entrenched, as it did in the past.

"That's why, in the private and public sectors, pay rises must be consistent with our inflation target.

"Otherwise every penny in pay rises will be very quickly swallowed up by higher prices. And we all remember the job losses that followed in the past once inflation takes a grip.

"Hundreds of thousands out of work, as happened in the 80s and 90s. We cannot allow that to happen."

He said the Government will soon announce how it will help people reduce their bills on a permanent basis by making Britain's homes more energy-efficient, and said the companies must "face their responsibilities" to help their customers through a difficult period.

© Independent Television News Limited 2009. All rights reserved.