"At the end of the talks, we agreed on a two-year deal and have suspended industrial action," said Willie Wallace, assistant branch secretary of Amicus GPMS Scotland.

The union's 250 members at the Inverurie mill in Scotland will be balloted in two weeks and their leaders are recommending a yes vote, said Wallace, who gave no details of the offer.

"The talks were frustrating at times and there was lots of to-ing and fro-ing. But I think we reached the best deal we could."

One eight-hour strike had already taken place at the start of last week with a further eight-hour walk-out called off following the talks. The dispute was triggered in March after a stalemate in long-running pay talks.

At the start of the conflict, union chiefs said the firm's negotiators originally suggested a pay freeze for 2006. They were angry at managers' "take-it-or-leave-it" proposals.

Assistant general secretary Tony Burke, who had warned of an all-out strike, said union memberships had grown since the conflict. "We can't say what we want yet, but they made an offer that was initially rejected," he said.

The new offer provides for a no-strings deal with a pay increase backdated to January 2006 and an agreed pay increase for 2007.

Union dispute
- Industrial action starts on 23 March after pay talks breakdown

- A four-to-one majority of Amicus members vote for industrial action

- Four-hour walk-outs start, with eight-hour stoppages threatened

- Work bosses, unions and ACAS agree to a pay deal subject to ballot in two weeks