The UK’s first new nuclear power plant for 20 years could be delayed again, after trade unions for construction staff working on the £20bn Hinkley Point C project announced a ballot for strike action in a dispute over pay.

More than 95% of members balloted by GMB and Unite rejected a pay increase offered by the French energy company EDF and its contractor Bylor after months of discussions.

Any extension of the labour dispute risks further time and cost overruns for Europe’s largest construction project, which is already behind schedule and over budget.

Separately, staff at outsourcing group Capita are to go on strike for six days from 5 October over changes to the company’s pension scheme that will result in a “massive cut” to their retirement income, according to Unite.

This year, EDF revealed the cost of Hinkley had risen from £18bn to £20.3bn and that construction of the plant would also be delayed by 15 months, meaning it might not start producing electricity until 2027.

Strike action was called off in June after an interim deal over bonus payments was reached in the hope a permanent agreement avoiding any further delays at the Somerset site could be reached.

Talks have since broken down and GMB and Unite will ballot members over strike action concerning the employment terms of more than 1,000 civil engineers.

The unions’ chief complaint is that the civil engineering contracts are “significantly below” the rates of workers on mechanical and engineering (M&E) deals.

“Members have made their views clear; the unions warned the amount of money being offered was not sufficient and this has proved to be the case,” Jerry Swain, Unite’s national officer for construction, said.

“The unions are fully prepared to return to the negotiating table if an improved offer is put forward.”

EDF Energy said it was “disappointed” and that it had offered increased pay, bonuses and benefits as part of a package that was “fair and reasonable”.

“The terms and conditions of employment at Hinkley Point C are superior to anything you will find in the UK construction industry,” it added.