Unions have agreed to suspend a £12m legal action and 15-months of industrial action against Southampton council over staff pay cuts.

Unite and Unison said they will ballot their 2,400 members at the council next month on a proposed deal to end the long running industrial dispute over cuts to staff pay, terms and conditions.

Pay cuts of between two per cent and 5.5 per cent, brought in last July by the previous Tory administration to make budget savings, provoked 12 weeks of rolling strikes, mass protest marches, and ongoing industrial action.

It left rotting rubbish spilling onto the city streets last summer.

Unions launched a legal claim, worth up to £12m, that the council failed to properly consult about its plan to dismiss workers if they didn’t sign up to worse contracts.

Separate unfair dismissal claims have been lodged on behalf of 1,000 union members.

The new Labour administration, which took power in May, has been negotiating with unions over the restoration of staff pay and conditions to end the dispute.

The council’s finance boss and lead negotiator councillor Simon Letts said: “On behalf of Southampton City Council , I welcome the decision to suspend the legal action as a vital first step to settling an industrial dispute which left a million uncollected bin bags rotting on the streets of our city.

“This is a vital first step in rebuilding a positive relationship with our staff and improving the quality of services we deliver to our citizens.”

Unison branch secretary Mike Tucker said: “We welcome the progress that has been made in the negotiations with the council and believe that the majority of our members will vote to accept the council’s proposal for a phased restoration of the pay cuts”.

Unite Convenor Mark Wood added: “We stated all along that this dispute will only be resolved by negotiation and agreement.

"We are very pleased with the way negotiations have been conducted since May and are hopeful of a positive outcome in the forthcoming member consultation and ballot.”

Details of the proposed deal will be published next week.

The Conservatives said the cuts to staff pay, terms and conditions protected 400 jobs at the cash-strapped authority.