MILITANT transport workers were last night handed a 10 per cent pay rise as part of a 'ransom payment' to prevent strikes during next year's Olympics.
Network Rail agreed the astonishing rise amid fears that industrial action could wreck the London Games.
But MPs accused the firm of caving in to hardliner Bob Crow, the head of the Rail Maritime Transport union, who has led a series of crippling strikes in recent years.
The deal, which has the private backing of ministers, will see 10,000 signallers, engineers, customer service staff and other employees across the country receive a 5.2 per cent pay rise this year, backdated to January, and a further rise of inflation plus 0.5 per cent from next January.
On top of that, staff involved in the Olympics will enjoy a £3.50 an hour bonus for each shift they work during the Games. Overall that will be worth about £500 a head, said Mr Crow.
Network Rail has also signed away any right to dismiss a worker during the Olympics Ð whatever they do wrong.
The extraordinary arrangement was condemned by Tory MPs, who accused Network Rail and ministers of giving in to blackmail.
Dominic Raab, who is pressing for new strike laws, said: 'The British public is being blackmailed. There's no justification for giving rail staff a 10 per cent pay increase plus bonus, whilst pay is frozen across the public sector.
'Yet again, the RMT has held the public to ransom Ð this time under the threat of disrupting the Olympics.'
Conservative MP Andrew Rosindell said: 'I don't think we should be bullied into making these payments. We should be looking at alternatives.
'If there are threats to strike during the Olympics then we should be bringing in people who will agree not to strike.' The deal is likely to infuriate London Mayor Boris Johnson, who has urged ministers to get tough with the RMT, whose Tube strikes have repeatedly damaged the capital.
But ministers have been privately urging employers to 'buy off' the RMT. They argue that new strike laws could provoke a series of walkouts by the big public sector unions.
Mr Crow described the pay deal as 'ground-breaking' and 'good'.
And David Higgins, chief executive of Network Rail, insisted the deal was 'great news'.
He added: 'Travellers get certainty that their journeys won't be disrupted by industrial action during the Games.'
Network Rail insists staff will not be allowed to strike and have to go to arbitration if they have any grievance during the Games which begin in July 2012.
But Mr Crow said the deal includes a clause which 'recognises the continuing right to withdraw labour'.
RMT yesterday scrapped Tube strikes due to start next week after an agreement in a dispute over two sacked drivers.
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