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London mayor Ken Livingstone is considering plans to guarantee that construction workers on Olympic contracts receive a minimum wage above the recommended rate for London workers in other industries.

The mayor has long campaigned for a legal minimum wage of £6.70 an hour for all workers in London, a figure he referes to as a "living wage". However, he is understood to be in discussions with unions over guaranteeing that Olympic workers are paid a higher minimum rate.

The rate would be guaranteed by measures similar to the current national agreements for the industry, such as the Construction Industry Joint Council pay deal for building and civil engineering workers.

A source close to the talks said that although discussions were at an early stage, the mayor was keen to ensure that workers were paid a fair wage, comperable with flagship projects such as Heathrow Terminal 5.

He said: "Ken Livingstone wants to avoid the Olympics work being flooded by the cheapest available labour. He recognises that we have to raise our sights in the construction phase."

The mayor is keen that the Games set new standards for fair employment

Mayoral spokesperson

A spokesperson for Livingstone said: "The mayor is keen that the 2012 Games sets new standards for fair employment."

Meanwhile, the main parties in the European parliament have bowed to union pressure and dropped a controversial clause from the draft EU services directive.

The directive was to have removed barriers to the formation of a single European market in services by allowing suppliers to abide by the rules in their country of origin, rather than where they were working.

Unions object to the "country of origin principle" as it would enable workers to be paid a lower minimum wage and abide by laxer safety rules. The parliament was due to vote on the measure yesterday.