NORTH-East business last night welcomed the Government's plans to end fixed retirement ages.

But unions voiced fears that people would be forced to "work until they dropped" under the legislation. Ministers said they were not forcing people to work longer, as they announced legislation that will create a right for people to work beyond the compulsory retirement age.

The proposals will be implemented by October 2006 as part of a European Employment Directive, which is also aimed at cracking down on age discrimination in the workplace.

The Government announced it would bring forward legislation to set a "default" retirement age of 65.

At present, companies can set whatever retirement age they like, with many people stopping work at 60 or even younger.

But under the reforms, retirement ages below 65 will only be allowed if they can be shown to be necessary.

The Trades Union Congress said it was unhappy with the announcement because it wanted workers to have a greater choice about when they could retire.

But last night, the North-East Chamber of Commerce welcomed the plans.

Andrew Sugden, director of policy at the chamber, said: "This is a win-win situation, both for employers and their staff. The European Employment Directive had threatened to muddy the waters, but the Government has thankfully brought some clarity.

"The North-East has an ageing workforce and employers in the region were hoping for a clear message from the Government. Now they will know the defined end point of the employer-employee relationship, but staff will still have the flexibility to ask to work beyond the age of 65 if they so wish."