UP to 700 workers at engine maker Cummins are involved in a dispute over pay changes which could lead to industrial action.

The company has introduced a new pay scale at its Darlington factory after a job evaluation programme, which has caused "unrest" among many of the 850-strong workforce.

A mass meeting between up to 700 employees at the factory and the Amicus union saw Cummins' new pay scale rejected, even though management insist only minimal numbers of jobs have been adversely affected by the restructure.

A five per cent pay increase is also due to come into effect at the factory, in the town's Yarm Road, in July.

Negotiations between union officials and management - who are understood to be meeting daily - are now said to be at a crucial stage.

Unions have said that if resolution can not be reached, industrial action would be considered, a situation US-owned Cummins said it is keen to avert, as it continues to expand and create jobs to meet demand.

The plant is thriving after increasing production by more than 50 per cent in the past year, and is now making more than 300 diesel engines every day, fuelled by orders from Europe and China.

Steven Nendick, Cummins' European communications director, said the company was keen to find a resolution to the situation, and negotiations were ongoing. "When we introduced the restructure, there were only one or two jobs that were negatively affected.

"Furthermore, there is a five per cent pay rise due to be introduced in July," he said.

"This has not yet got as far as strike action, but this comes at a time when our business is increasing and we have a full order book from customers.

"The main thing for us is that we continue to support our customers, and we hope to resolve this as soon as possible."

Mike Routledge, regional officer for Amicus, said "There is unrest at the Cummins plant in Darlington surrounding the introduction of the job evaluation scheme.

"The workforce has held a number of mass meetings, and has voted to reject the proposals put to us by the company.

"However, the union and management are continuing to talk daily in the hope we can avert potential industrial action."