The firm confirmed in its latest results today that pay levels have already been reinstated “where prospects and profitability have improved within our business sectors.”

Chairman Roger Fidgen added: “In the next financial year, the increased salary costs will potentially lower margins.

“However, it is vital that we maintain the goodwill of our staff and continue to invest in them, as our main asset.”

Waterman shed  278 staff during the last financial year as the number of employees fell to 1,216 from 1,494.

Results for the year to June 30 show the firm suffered a £2.3m loss compared to a £6.3m pre-tax profit last time as turnover fell to £83.2m from £122.4m.

The firm believes the outlook is brightening for the UK led by a recovery in commercial space in London and infrastructure work.

Fidgen said: “The City and West End of London are short of major office developments and there is encouraging progress by a number of developers who are starting projects.

“Waterman is one of the leading firms in London and this recovery will be important while the public sector is downsized.

“Other markets such as infrastructure and power will also recover since, as a growth economy, the UK has to have a transport system and energy supply which aids business.”