Under the new deal a large part of previous bonus payments will be wrapped up into the basic rate and will see consequent holiday pay, overtime rates and pension contributions increase.

This will see workers on craft pay levels, including milestones, rise to over £18 an hour for the civil engineering sector.

The dispute had been rumbling since the spring. One of the principal issues was that the pay rates for workers on civil engineering contracts were significantly below the rates of workers covered by the mechanical and engineering contract.

Negotiations have involved the client EDF and joint venture principal contractor Laing O’Rourke and Bouygues TP as well as the unions.

Construction unions Unite and GMB were preparing for strike action after workers overwhelmingly voted last month to reject a previous offer.

Under the new deal, workers will receive back pay from 1 January 2017 and 31 May 2017, when an interim bonus scheme was introduced.

This will see some workers receiving one-off payments running into four figure sums.

Unite regional secretary, Peter Hughes said: “This is a landmark agreement which will now set the benchmark for pay rates on flagship construction projects throughout the UK.

“The determination of EDF to broker a deal was critical in ensuring the pay negotiations were satisfactorily resolved.”

Unite’s lead convenor at Hinkley Point Malcolm Davies said: “The negotiations have been protracted but the unity of the workers on the project has ensured that we have finally arrived at a pay deal which properly financially rewards the workforce.

“Unite will continue to ensure that workers at Hinkley are treated fairly and decently and hopefully we are now entering a period of industrial harmony.”

GMB national officer Phil Whitehurst said: “The employers side in the negotiation should have declared their hand way before January 2017, but chose to take it to the wire.

“This could have resulted in a trade dispute which would have had devastating consequences to this prestigious project. Let’s now hope that an open and transparent relationship will precipitate from this on the civil construction phase of HPC.”