The RMT union has declared an official dispute with Transport for London (TfL), saying it has begun preparations to ballot Night Tube drivers over industrial action.
In a statement this morning it accused TfL over "failure... to honour an agreement on career progression into full-time jobs for Night Tube drivers".
It added that despite "repeat assurances" by TfL, drivers have not been transferred into full-time roles.
The timings of the ballot are such that Night Tube drivers could go on strike over Christmas, potentially disrupting one of the busiest times of the year for late-night travel.
“Staff are rightly angry and frustrated that an agreement that would have allowed night tube drivers to progress to full time driver jobs is being flouted by the company," said RMT general secretary Mick Cash.
"That is wholly unacceptable and has left RMT with no alternative but to declare a dispute and begin preparations for a ballot.
“RMT remains available for talks but we will not sit back while our members are denied the career opportunities they deserve.”
But TfL hit back: "Successful Night Tube services have been running for over a year in line with agreements reached with the unions," said Nigel Holness, operations director for London Underground.
"We have already met them on this issue, acknowledged their concerns and have agreed that swift attention is needed. The threat of a ballot is wholly disproportionate and unnecessary."
The news comes weeks after TfL warded off another potential Tube strike, this time after a dispute with the Aslef union.
Tube drivers suspended a strike at the last minute at the beginning of this month after talks on working conditions made progress.
The two sides had come to blows over the number of shifts and weekend shifts Tube drivers are asked to work.