ONE million public sector workers will bag pay rises of 5% or more next April, Rishi Sunak confirmed today.
But funding for the hikes will have to come from existing Whitehall budgets and won't be paid for through tax hikes or borrowing.
The PM accepted all headline wage recommendations from the independent pay review body.
He insisted the hikes won't fuel inflation because funding will come from "reprioritising" budgets, alongside a huge rise in the NHS surcharge legal migrants pay when they move to the UK.
From April, police will get a 7% salary uplift, while teachers will be given 6.5%.
Doctors will receive a 6% rise plus a £1,250 bonus.
Meanwhile, armed forces will get a 5% hike.
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At a Downing Street press conference, Mr Sunak issued a stern warning to union chiefs: "I urge all union leaders to accept these pay offers and call off their strikes.
"Today's offer is final.
"There will be no more talks on pay and we will not negotiate again on this year's settlements.
"No amount of strikes will change our decision."
He added: "Instead, the settlement we reached today gives us a fair way to end the strikes. A fair deal for workers and a fair deal for the British taxpayer."
In a major win for the government, all four education unions have backed the 6.5% hike for teachers.
Crippling school strikes planned for September have been called off while the pay deal is put to members of the NEU, ASCL, NAHT and NASUWT, with a recommendation to accept.
In a joint statement, Mr Sunak, Education Secretary Gillian Keegan and teacher union chiefs said: “This is the largest ever recommendation from the School Teachers’ Review Body (STRB).
"A 6.5% increase for teachers and school leaders recognises the vital role that teachers play in our country and ensures that teaching will continue to be an attractive profession."
Today's announcement comes as junior doctors today begin their longest ever walkout - as hospital bosses say they are “sick to the back teeth” of strikes.
Trainee medics will strike for five days in a row in England before consultants stage another walkout for two days from July 20.
The PM said: "I think we've done the fair thing.
"And I would urge the junior doctors and consultants to see that commitment.
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"And that comes along all the other things that we've done for the NHS - record funding and a long term workforce plan, fully funded.
"So there are more doctors, more nurses more of every type of health care worker in the NHS."