Japanese car giant Toyota today announced cuts in production and pay at its two UK factories in another sign of the crisis facing the motor industry.

The cuts will start next month at the sites in Burnaston, near Derby and Deeside in North Wales and last for a year.

The company, which employs 3,900 workers at its main production site in Burnaston and 570 at its engine plant in Deeside, has already cut 200 temporary jobs and opened a voluntary redundancy scheme last week.

A statement said: "Following extensive consultation with our employee representatives, and with input from all employees, it has been agreed that the best way to secure long term employment is to temporarily reduce working hours and base pay by 10%.

"This work share arrangement will take effect from 1st April and will be in place for one year, during this time we will continue to monitor the market and company situation closely.

"We believe the measures we have announced give us a greater opportunity to maintain employment through this difficult period."

The announcement was made as car company officials, bankers and union leaders were arriving at the London headquarters of the Business Department to discuss the Government's assistance programme for the industry, originally announced by Business Secretary Lord Mandelson in January.