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The home secretary, Jacqui Smith, decided that that 2.5% pay rise would only be introduced from December, rather than backdated to September, contrary to the recommendation of an arbitration panel. The federation insisted this meant the deal was effectively reduced to an annual rise of 1.9%.
"It is not about the money," Berry told the committee. "It is about a principle of feeling betrayed; that we went into a negotiating process in good faith.
"It is that trust which has been broken between the police and the home secretary which is the biggest cost of this."
Berry told the committee that she warned Smith in August of the consequences of failing to ratify the decision to award the pay raise.
The Merseyside chief constable, Bernard Hogan-Howe, released a statement today saying he "wholeheartedly supported" the federation's campaign because his "exceptional" officers deserved better.
Mr Hogan-Howe said: "I feel that officers have been treated in a shabby way. The staff side entered into arbitration genuinely willing to accept the outcome and understanding its binding nature.
"It seems totally unacceptable that the government can reject those elements of that arbitration decision that they consider inconvenient."
Berry told the commons committee she had written to the prime minister, Gordon Brown, calling for an urgent meeting to discuss the way forward. Last week, the federation called for Smith to resign after passing a vote of no confidence.
Berry said a ballot on the right to strike would be held in the new year, but she did not believe officers wanted to take such action. "But if you back them into a corner where you give them no option, that's what they may ask to do," she warned.
Opinion polling would be carried out to gauge the public attitude, she said.
The Nottinghamshire chief constable, Steve Green, also gave evidence to the home affairs committee today.
He said: "We've reduced crime for six consecutive years in Nottinghamshire. We've dragged the force from being seen as a failing force to being seen as an improving and impressive force and the least my officers expect is to be recognised for that.
"They have performed out of their shoes to improve the performance of Nottinghamshire police. They deserve to be paid what they are entitled to and I believe the pay award paid from the correct date is what they are entitled to."
Asked what the government should do next, he said: "There are opportunities for the government to say 'we made a mistake here and we need to put it right'. It is a big thing to do but I think there are big people who can do it."
A policewoman who was shot in the line of duty also accused the government of showing a "lack of respect" for the work done by the service.
Rachael Bown, who was honoured for her bravery after being shot when she tried to arrest a man in Nottingham in 2006, sent a message that was read to the committee by Green.
She wrote: "I would ask that the government recognise the personal sacrifice made by officers and their families.
"By awarding the full pay rise as agreed, they will show their support for the police. They need to lead by example.
"As is shown in my case, there is a lack of respect for the police in this country; the government are leading this lack of respect."
Bown, who returned to duty in March despite still suffering panic attacks and nightmares, said: "I am low down on the pay scales and any cut in wages will have a massive impact on me due to inflation."
After today's session, the committee issued a letter saying that members were unanimous in viewing the pay commitment as a "question of trust". It warned the decision was impacting "on police morale, on recruitment and retention, and on the general level of trust".
The letter told Smith: "A decision by you to pay the new rates from September this year would be a demonstration of the government's good faith and a just reward for police officers.
"We do not accept that the police are in the same position as other public service workers in that they do not have the ability to withdraw their labour in pursuit of any pay claim.
"We feel therefore that it is incumbent on the government to honour the recommendations of the independent tribunal. This is a question of trust."
The MPs added that police authorities had already budgeted for the increase and would not require more funds from Whitehall.
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