FRANKFURT (Reuters) - Cabin crew trade union UFO has rejected an offer to mediate a dispute over pay and conditions with Lufthansa's <LHAG.DE> budget flights unit Eurowings, Lufthansa said on Sunday, raising the probability of strike action.

"It is more obvious than ever that the union does not want to find a solution," Eurowings human resources director Joerg Beissel said in a statement.

Eurowings put forward a new offer last week that includes an average pay increase of around 7 percent. At Germanwings, UFO said it has failed to reach an agreement on part-time contracts.

Lufthansa cabin crew and pilots have embarked on a series of strikes over the last few years as the airline battles to reduce costs in order to compete with low-cost rivals and long-haul carriers with leaner cost bases.

(Reporting by Georgina Prodhan; editing by Susan Thomas)