About 3,500 workers were involved in the dispute

Unions had been in dispute with Peugeot management following a vote to reject the company's original pay offer, and a subsequent vote for industrial action.

A strike took place at the Ryton plant on 13 and 14 February.

But on Friday, the unions announced its members had accepted a 7.3% two-year pay deal by 2-1 to resolve the long-running pay row.

'Move forward'

Dave Osborne, T&G national secretary said: "Members have accepted the company's improved offer and the dispute at Peugeot is now resolved.

"Had it not been for the bloody-mindedness of management, this could have been sorted out weeks ago.

"It is only of late that common sense has prevailed on the part of management in tabling a new offer."

Duncan Simpson, national officer of Amicus, added: "We now need to put these acrimonious discussions behind us and concentrate on working with Peugeot to secure long-term prosperity and employment for the company and our members."

A spokesman for Peugeot welcomed the workers' decision.

"Two thirds of employees accepted the company's offer and we will now be able to all move forward producing the award winning 206."