A PAY dispute which led to workers at a County Durham engineering plant staging two seven-day strikes has been resolved, The Northern Echo can reveal.

Employees at the Tanfield Engineering Services factory, in Stanley, have opted to accept a three per cent pay increase, after previously rejecting the company's offer of 2.5 per cent.

The refusal of the original offer led to about 90 of the 122 employees taking industrial action against their employers, by staging two week-long walkouts last month - which brought the factory to a near standstill - and imposing a ban on overtime.

More industrial action had been threatened at the factory - which accounts for about ten per cent of parent company The Tanfield Group's £41m sales - with workers and the Amicus trade union vowing to begin a fortnight-long strike on Monday if there was no resolution.

However, last night, an agreement had been reached between unions and management at the factory, which provides a variety of engineering services, including fabrication and assembly. Davey Hall, regional secretary for Amicus, said the union and members were satisfied with the increase - which equals about 30p an hour - after almost five months of negotiations.

"We are pleased the dispute has been resolved to the members' satisfaction, and a vote showed that a significant majority were willing to accept the company's revised offer," he said.

"It comes at a time when the strike action was about to be escalated to a two-week long strike, which was due to start on Monday, so as a result of members accepting the revised offer, the action has now been averted."

A spokesman for The Tanfield Group said the company was pleased the dispute had been resolved.

"We are very disappointed the situation went as far as industrial action being taken, but are now delighted it has been resolved to the satisfaction of the workforce and the management team," he said. Tanfield said the strike action had no impact on its core divisions, zero-emission vehicle manufacturers Smith Electric Vehicles and UpRight Powered access, which The Northern Echo yesterday reported are to make major in-roads into the $4bn US electric vehicle market by the end of the year when the company increases its Stateside production five-fold.

It is also looking to open two manufacturing bases in the US, which could lead to the creation of 50 to 100 jobs at its headquarters in Washington, Tyne and Wear.