Managers at the Peugeot plant at Ryton have been stunned by a union vote where workers rejected a deal that would have given them a shorter working week.

A ballot result announced yesterday showed that 59 per cent of those who voted were against the new deal.

Peugeot still intends to issue the new contracts, to be effective from mid-August, despite the result.

The company pointed out that only 77 per cent of the staff voted, lower than management or unions expected. Company bosses and union leaders are meeting tomorrow to work out a way forward.

A Peugeot spokesman said:

"We are obviously extremely disappointed that this action has been taken. We were asked by the staff to look at working hours and have come up with these ideas.

"It is a very strange position where people could be going out on strike because they are being asked to work less hours!"

Just under 3,000 staff work at the Ryton plant on the 206 model.

Despite problems at other car plants across the country, business at Ryton is booming with extra shifts to meet demand.

The company said staff would work 36.75 hours a week, or 35 hours excluding meal breaks, under the new deal.

The weekend teams would have to start working every third Monday, but overall the number of hours worked would fall.

Extra staff taken on last year would have the new contracts and be confirmed as permanent staff which management said they thought would be welcomed.