A strike planned by local council employees on 14 August has been suspended following a breakthrough during talks at the conciliation service Acas.

Public sector workers staged a 24-hour walkout last month after management refused to meet union demands for a 6% staff pay rise, offering 3% instead.

Two days of talks ended on Monday evening with Acas putting together a backdated pay deal.

We believe that the proposals represent a fair deal for local government employees and a strong platform to end low pay and unequal pay

Joint union statement

Unions have agreed to suspend all further strike action and will now put the package to their members.

The two-year pay deal will result in wage rises ranging from 7.7% to 10.9% for the lowest paid.

Acas is recommending that from 1 April 2002 there should be a 3% increase, or a minimum of �5 per hour, and from 1st October this year there should be an additional 1% increase for the lowest paid.

It is suggesting that from 1 April 2003, there should be a 3.5% increase with an additional 1% for the lowest paid.

It also proposes setting up a commission to report within a year on how to tackle low pay and ensure equal pay for council workers.

A joint statement on behalf of the three unions read: "The Acas proposals are the result of many hours of tough negotiation.

"We believe that the proposals represent a fair deal for local government employees and a strong platform to end low pay and unequal pay.

"If they are accepted it will bring an end to this dispute."

'Sensible compromise'

Charles Nolda, executive director of the National Employers Association, said: "We are very pleased to have got to this position today where the industrial action is suspended.

"It is a sensible compromise that both sides will now be recommending to their respective members.

"We think it is in the interests of local government, the public and our staff that this dispute is resolved."

Some full-time staff earn less than �10,000

One of the negotiators, Jack Dromey from the Transport Workers' Union, welcomed the deal.

Mr Dromey told BBC Radio 4's Today programme the deal would help counter the "mounting crisis" of recruiting and retaining council staff.

He said: "This is a just settlement for the low paid.

"The lowest paid in local government will see over the next two years, a 10.9% increase.

"An army of low paid, part-time, women workers will crash through the �5 a hour barrier."

Both sides are now to consult their respective memberships on whether to accept the Acas recommendations.

The consultation is likely to last six weeks and all industrial action has been suspended during this time.

Up to one million council staff went on a 24-hour strike last month.

Talks at Acas ended in stalemate last Saturday after 10 hours of negotiations, but resumed on Monday morning.