University students may not be able to graduate this summer after pay talks with lecturers broke down.

The warning has come from members of the Association of University Teachers (AUT), the higher education union, at Sussex University.

Staff and university employers are trying to reach agreement in a national pay dispute. Staff are now expected to be balloted on industrial action, which could include strikes and an assessment boycott which would result in students' work being left unmarked and exam preparation halted.

The union says it remains hopeful any action can be avoided but it warns a protracted dispute could mean students failing to graduate this summer.

Sussex University AUT president Jim Guild said: "Staff at Sussex University have had enough of being told we would be paid more but the university cannot afford it. We hope the employers will continue to negotiate as disrupting the studies of hardworking Sussex University students is a desperate last resort, but one we will take if necessary."

AUT, along with the National Association of Teachers of Further and Higher Education (NATFHE), are arguing the universities have reneged on a promise to use extra money they will receive from top-up fees to sort out staff pay.

Professor Alasdair Smith, Vice-Chancellor of the University of Sussex, said: "The AUT regrettably had made threats of strike action even before negotiations started. We would very much hope that action of this kind can be avoided."