Strike action threatened by more than 1,000 bus drivers in the Edinburgh area has been suspended following negotiations.

A massive transport headache for the capital and surrounding areas was predicted when the Lothian Buses employees announced an indefinite strike from Friday.

However, a last-minute breakthrough followed several hours of hard bargaining between the bus operator and union representatives.

The details of a new pay offer will be voted on by the company's 1,300 employees next week.

"Virtually all" services will run

A spokesman for Lothian Buses said the latest talks had been positive and that both sides were keen to achieve an agreement.

Transport and General Workers Union (TGWU) officials are hopeful the deal will be accepted.

Union spokesman Peter Williamson said drivers will be balloted on Tuesday and until then the strike is off.

He said: "Both the company and trade unions have agreed to call off the industrial action.

"There is an increased offer which we will meet with the members and have another ballot next week.

Productivity improvements

"Hopefully this will be satisfactory enough to end the strike action."

The strike had looked unavoidable when a vote on a revised offer from Lothian Buses was rejected by 94% of the TGWU members balloted.

Lothian Buses had said it was deeply disappointed that the majority of drivers rejected what it described as one of the most generous pay increases in Scotland this year.

The operator had offered a deal worth 15% over two years.

That was 5% this year and a 10% increase in 2003, linked to productivity improvements.

Lothian Buses is the biggest operator in the capital with 500 vehicles on the road during rush hours.