Nigeria's main labour union on Friday threatened to call a strike after its leader was beaten up at a rally, sparking outcry in Africa's largest economy.

The Nigeria Labour Congress (NLC) claims authorities in southeastern Imo state arranged the attack to stifle protests over workers' rights.

It said Joe Ajaero was badly hurt when police and a group of "thugs" assaulted the union leader, bundling him into a van and briefly detaining him.

Police denied arresting Ajaero and claimed they took him into "protective custody" to shield him from a mob attack, while the state governor told Nigerian media the assault was an "ugly coincidence" and accused Ajaero of meddling in local politics.

The NLC and Nigeria's other main union movement the Trade Union Congress (TUC) have been in talks with the government over recent reforms that have seen fuel and food prices sharply increase.

In a joint statement on Friday they said they would "no longer guarantee industrial peace in Nigeria" from Wednesday next week if the government failed to meet its demands, which included the resignation of police officials.

"We are worried that it has become criminal for workers in Nigeria to gather for a peaceful protest," they said.

Recent strikes have had a mixed turnout. Last month the unions agreed to call off a planned strike in protest over rising living costs after the government offered a package of measures to cushion the impact of its economic reforms.

The NLC, an umbrella group of trade unions, had planned a demonstration in the Imo state capital Owerri on Wednesday over "non-payment of salaries and pensions for 44 months and violation of other labour rights," spokesman Benson Upah told AFP.

But state police said the protest had been banned.

The unions said "police personnel" attacked Ajaero after a crackdown on the demonstration.

The union leader was taken to a police hospital and treated at the city's Federal Medical Centre, the NLC said. It has since shared pictures showing Ajaero with a bruised face and a neck brace.

Leader of the opposition Labour Party Peter Obi condemned the attack, saying it "shows the level of lawlessness, impunity, criminality, and rascality that have engulfed our dear country".