The Communications Workers' Union (CWU) is closer to settling this year's pay dispute with BT. Union bosses are recommending workers accept BT's 3.5 per cent pay increase to be backdated to 1 April.

Throughout the pay talks - described by the CWU as "long and tough negotiations" - BT had offered a below-inflation deal which would, in effect, have led to a pay-cut for workers. The CWU, which represents around 54,000 of BT's 100,000-odd workers, described BT's early offers as "derisory" and warned that the mood among members was "pretty hostile".

But announcing the settlement today, the CWU said: "The offer is now clearly above the current rate of inflation and ranks with the best pay deals being achieved this year in other companies."

Workers will be balloted on the pay offer later this month.

Originally, BT staff had demanded an eight per cent increase in wages to repay them for their "loyalty, hard work and co-operation". ®

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