Also Frank Morris, the former Unite union representative at Crossrail, who was at the centre of the sacked workers row has been reinstated and will return to work on 9 September.

The deal has left both sides claiming victory in a fresh war or words just after after an issued joint statement was released.

The acrimonious blacklisting dispute saw a flurry of protests around central London and at high-level BAM sites around the country as well as an intense political lobbying campaign by the union.

Morris was dismissed along with 28 electrical workers from the sub-contractor EIS, prompting union claims that BFK terminated the contract because of trade union activity and whistleblowing.

Unite previously claimed his name was on a blacklist because he raised health and safety concerns when he was working at the Olympic site.

A joint statement issued today said: “BFK acknowledge that the conclusion of the EIS contract could have been handled better and BFK and Unite have agreed to work together to continue the provision of transparent working practices including safeguarding the right of workers to choose whether or not to join a trade union.

“BFK and Unite agree that there has been no contravention of the Blacklisting Regulations on the BFK Crossrail projects.

It added: “BFK and Unite are committed to improving ways of working together.

“BFK and Unite will build upon their working relationship for the good of all involved and both parties look forward to working with each other in the future.”

Andrew Wolstenholme, Crossrail chief executive seized on the statement and said: “Blacklisting is indefensible, unacceptable and unlawful.

“Over the last year, the Unite union has made a series of misleading and unsubstantiated allegations concerning blacklisting on the Crossrail project.

“By their own admission, Unite advised the Scottish Affairs Committee that their evidence was circumstantial and was not sufficient to prove blacklisting.  Unite has now issued a joint statement with our western tunnels contractor BFK stating that no blacklisting has taken place.”

But a Unite spokesman hit back and said: “Whilst we cannot comment on the resolved dispute surrounding Frank Morris, it is important to correct Crossrail’s press release which wrongly states that Unite has said there has been no blacklisting at Crossrail.

“What Unite clearly said is there have been no breaches of the current regulations. We believe this indicates the weakness of the current legislation.”

The Blacklist Support Group said: “Frank Morris came to symbolise the struggle the unions are waging against the illegal blacklist of their members by major construction firms after he was dismissed last September.

“His reinstatement sends a message out: unions are back and we are ready to fight our corner if we have to.”