The agreement, reached at dawn after four days of almost non-stop talksbrokered by a governing party delegation and the labour minister, averted apotentially bloody confrontation with workers barricaded in the factory insoutheastern Ulsan.

Hyundai's management agreed to reduce the number of workers to be laid offto 277 from a previous offer of 460, a figure proposed by mediators whichthe union accepted on Friday.

Hundreds of other workers would be put on unpaid leave lasting a year and ahalf, with six months of job retraining. Management had proposed the leavewithout training and the union had demanded one year with six months oftraining.Hyundai Motor also pledged no more layoffs for the next two years.Both the Hyundai company and union presidents, at a news conference in Ulsanto announce the deal, apologised for the prolonged dispute but said it couldherald a new era for labour-management relations.

"I would like to convey my apologies to labour minister Lee Kee-ho andmembers of the ruling party and I hope that such pain from labour-managementstrife does not occur again," Hyundai Motor Union president Kim Kwang-shiksaid .

"I wish to make this a point of change for improving trust between labourand manageement," he said.

Company president Chung Mong-kyu also apologised "for causing anxiety to thepeople".

"I hope we can use this incident as a way of setting up a newlabour-management culture in order to overcome the current national economiccrisis. I will continue our effort to minimise layoffs," Chung said.Labour minister Lee said the agreement "has set a milestone for newlabour-management relations".

Striking workers have occupied the Ulsan factory since July 20 in protestagainst Hyundai's decision to cut jobs -- the first mass layoffs sincelegislation was passed in February making it easier for companies to makemajor work force reductions.

Allowing companies to make mass layoffs was one of the core conditions oflast December's $58.35-billion bailout package led by the InternationalMonetary Fund.

The labour ministry has said the work stoppages at Hyundai Motor have costthe company and its contractors some $1.2 billion in lost production andbadly needed exports.

Many of the workers who had been occupying the plant since July 20th alongwith family members, had abandoned the tent city they had set up inside thespraswling complex by daybreak on Monday.

But some were still barricaded inside and appeared angry about theagreement, witnesses said.

A witness said angry workers had evicted journalists from the tent city andthreatened outsiders who attempted to enter the area.

At the peak, some 15,000 riot police had been deployed to evict about 5,000striking workers and their families.