Hollywood is facing catastrophic production stoppages and cancelled awards ceremonies for the second year running as the Screen Actors Guild prepares to call a strike.

The union, which represents about 120,000 performers, including many A-list stars, said that it would hold a vote next month to authorise a walk-out in a final effort to improve its contract with Hollywood's major studios.

It would be the guild's first strike since 1980, when it brought production to a standstill for three months.

“SAG members understand that their futures as professional actors are at stake, and I believe that SAG members will vote to send us back to the table with the threat of a strike,” Alan Rosenberg, the union's president, said.

If the industrial action goes ahead the 81st Academy Awards broadcast, scheduled for February 22, could be called off. Last year it was a stoppage by the Writers Guild that shut production in Hollywood, although the dispute over DVD fees and internet royalties was resolved in time for the Oscars to go ahead. The estimated cost of the strike to the Los Angeles economy was $3 billion (£1.9 billion).

Actors including Danny DeVito and his wife, Rhea Perlman, have pleaded with their fellow performers not to vote for a strike amid the current recession. Others have cautioned about the dire consequences of a production shutdown. Mike Farrell, who played B.J. Hunnicutt in M*A*S*H, sent an e-mail to guild members that said: “I'm not anti-SAG. But I'm anti-idiocy. I'm voting ‘no'.”

To authorise a strike, 75 per cent of the guild's members would have to vote “yes”. That would give the union's governing board permission to call a work stoppage “if and when the board determines it is necessary”.

Ballots are set to be posted to members on January 2 and will be counted on January 23.

The guild's decision to hold a vote came two and half weeks after a federal mediator failed to break months of stalemate in negotiations over the actors' main contract with studios.

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