Fears of a Christmas shortage of meat have been quelled after inspectors reached agreement with the Meat Hygiene Service over pay.

Unison called off the planned strike on Tuesday just hours after announcing that a walkout would take place from 2-4 December.

Inspectors had agreed to a pay rise of 2.99%, backdated to August 2007, the union said. However talks over the second year's pay deal and changes to work patterns were set to continue, it added.

The agreement completely ruled out the possibility of any industrial action taking place before Christmas, a spokesman for the Meat Hygiene Service confirmed.

"We still have some tough talking to do over the 'work anytime' proposals and members have a right to expect movement on their 2008 pay deal," said Simon Watson, Unison national officer for meat inspectors. "However the agreement with the MHS signals a willingness to reach a negotiated agreement and Unison will work hard to ensure we get the best deal possible for our members."

Talks had intensified after Unison members voted two-to-one in favour of a 72-hour walkout last Friday that could cause chaos to red meat supply in the build up to Christmas. Industry estimates had put the potential cost of strikes to the sector at £3m.

The MHS said that, as a gesture of goodwill, it would be implementing the first year of the two-year pay deal from January 2009. "I have always been confident that we could reach an agreement and I look forward to continuing our constructive dialogue in the new year," said chief executive Steve McGrath.

NFU Scotland, which had expressed major concerns over the festive meat supply, welcomed the agreement. "The festive period is such an important time for farmers and the meat trade," said NFUS vice-president Nigel Miller. "The potential for disruption was hanging over the industry but now we can all look forward to this busy spell."