Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said BMW's £2.5bn investment in the Birmingham plant heralded a new era.

}He said: "This marks the turning point for Longbridge, where workers have given a lot through productivity and flexibility."

Rover workers are having to accept radical new working practices

Roger Lyons, general secretary of the Manufacturing, Science and Finance union said: "We are delighted with confirmation of the investment from the Government in partnership with BMW/Rover.

"We are particularly pleased about the future job security that this agreement will bring for all our members."

'Pain may not be over'

But the deal is conditional on workers accepting radical changes to their working practices.

That inevitably means the introduction of more hi-tech machinery to produce cars which could signal further job losses in the future.

National Secretary of the Transport and General Workers Union, Tony Woodley warned: "The pain and loss of Rover isn't over yet.

"There is a need for Rover to manufacture cars in a completely different way from the past. For that reason my problems as chief negotiator are far from over - they are only just beginning.

"People should not under-estimate what is ahead of us - it will be a very different Longbridge."

The unions had engaged in a painful series of negotiations with BMW in the past year, culminating in an agreement to cut 2,500 jobs to boost productivity.