A PAY dispute that could have led to hundreds of bus drivers going on strike has been settled, it was confirmed last night.

The Transport and General Workers Union (TGWU) said agreement had been reached with Stagecoach NorthEast on a new deal which its members in a ballot had accepted.

About 500 staff working at depots in Darlington, Hartlepool and Stockton were balloted.

The dispute began over plans to stagger a pay rise, bringing drivers up to £7 an hour.

Stagecoach later offered to pay the 45p hourly increase with immediate effect from June 26 and said it would backdate the pay rise to May 1, as demanded by the union.

Allan Gray, the TGWU's regional industrial organiser, said: "I am pleased that we have reached a suitable conclusion and that the general public will not be inconvenienced by an industrial dispute.

"However, I am still slightly perturbed that the company are looking at having drivers work longer hours and spending more time behind the wheel when they have a stressful enough job already."

He said: "As a union, we will always strike to protect and improve our members conditions."