Workers at CE Electric, which distributes electricity across North East England, were set to go on strike for seven days, starting at 4pm next Friday.

But according to company bosses talks are continuing, and union chiefs are yet to put in their official notice of strike action.

A spokesman said: "We're hopeful of a resolution and talks are continuing through the Acas arbitration group."

The GMB union said the dispute is over the failure to pay comparable wages to those earned elsewhere in the utilities sector.

A spokesman for the union confirmed that talks are continuing today, but said it was standard practise to put notification in with the minimum seven days notice.

An official strike ballot this month saw the firm's union members vote by 88 per cent to 12 to take strike action.

Any industrial action could severely disrupt work on a £63m contract to replace street lighting in South Tyneside.

CE Electric connects the new street lights once they have been installed by Balfour Beatty, which is responsible for providing and maintaining street lighting and highway signs for the next 25 years.

During the first five years, 80 per cent of the borough's lighting columns, and about 8,000 signs are set to be replaced.

An overtime and standby ban by CE Electric workers has been in place since the last week of June.

The latest company offer made on July 16 with Acas, was rejected by 88.5 per cent.

GMB organiser Joan Anderson said: "These workers are underpaid."

A spokesman for South Tyneside Council, said: "Public safety will not be compromised as a result of this dispute, and the PFI project is still on course for completion within timescale and budget."