Liberal Democrat activists in the Westcountry will lead calls at the party's annual conference for local public sector pay plans to be killed off.
Critics claim that ending uniform pay for teachers, nurses and other public sector workers threatens to strip tens of millions of pounds from the region's economy.
Constituency parties are preparing a series of critical motions to put before the Lib Dem conference in Brighton next month, including demands for local and regional pay to be jettisoned. The motion is co-sponsored by Lib Dems in South East Cornwall.
South East Cornwall councillor Edwina Hannaford said: "Cornwall needs fair pay, not regional pay – this is more about cutting pay than fairness.
"South East Cornwall Liberal Democrats are so concerned about George Osborne's regional pay proposals that they have taken the lead in putting down a motion to the Lib Dem conference.
"If low pay was good for the economy, Cornwall would be booming – but we are still one of the poorest regions in Europe, the reason we have been awarded less developed status and a further £500 million in European structural funds."
Proponents of reform, chiefly Conservatives, argue higher salaries for state workers in low-paid areas make it difficult for private sector firms to recruit staff.
Chancellor George Osborne signalled his desire to end national wage rates and "localise" public sector salaries in his autumn statement. Independent pay review bodies are considering the case for the change.
Liberal Democrat MP for St Austell and Newquay, Stephen Gilbert, who has led a campaign in Parliament to block the pay proposals, said: "We all owe a huge amount to our hardworking nurses, teachers, police and firemen and other public servants who are already doing tough jobs and often for a limited reward and are struggling to make ends meet and get on the housing ladder.
"The reality is that the introduction of local pay would be nothing more than a race to the bottom in pay and conditions for people that we all depend on. Anyone who thinks that local pay may mean more money for workers in Cornwall and Devon is living in cloud cuckoo land – with only so much money in the pot it's clear we would lose out and it would further institutionalise the low wage economy we suffer from."
The conference motion, which would become party policy if it garners enough support from the rank-and-file, warns that regional or local pay could "adversely affect many regions and nations of the UK, especially those with relatively lower incomes or relatively weaker private sectors".
It also raises the spectre of a "brain drain" as public sector workers leave for better pay elsewhere.
The motion says evidence that public sector wages are squeezing out the private sector is "inconclusive" and it goes on to call for the Government to "rule out any further expansion in regional or local pay", which already exists in the courts system.