A deal has been struck to save thousands of jobs at Luton's GM van plant, it was announced yesterday afternoon.

The company said that following extensive talks between Vauxhall, its new owners Magna International, trade union Unite and the British government, an agreement had been secured to protect the "jobs and prospects" of the company's 5,000 UK workers.

There will be no enforced redundancies but employees will face a two-year pay freeze and "other measures" will be implemented as part of the deal.

GM's UK spokesman Denis Chick said the Luton plant would be "maintained as a key manufacturing operation until at least 2013 with consideration being given to a future model at the plant beyond that date".

It was feared that thousands of jobs could have been lost at Luton and Ellesmere Port, in Cheshire, had Magna decided to close the plant as part of its cost-cutting restructuring plan.

Mr Chick said: "This is very good news for Vauxhall's UK operations and is the result of a tremendous team effort between leadership of Unite and the management team at Vauxhall."

Senior Unite rep at Luton's Kimpton Road plant, Paul Geary, paid tribute to everyone who had helped secure the agreement.

He said: "We want to say a big thank you for the support that we've had from the local community, from Luton Today, from Luton Town Football Club and from Kelvin Hopkins and Patrick Hall, the MP for Bedford.

"We want to give credit where credit's due to Lord Mandelson and his team. He was here, there and everywhere fighting our corner."