A controversial new pay and grading package that will see some council staff suffer pay cuts of between £2,000 and £7,000, while others gain, has been approved.

The new structure at the Vale of White Horse District Council comes into operation in April and will cost it an extra £1m in wages over four years.

The biggest beneficiaries will be workers in the lower salary brackets. Senior planning, legal and finance staff will be the main group to lose out.

Last month, councillors deferred a decision following the intervention of staff at directorate level.

But following more talks between councillors, staff and unions, a deal was hammered out after more than two years of talking and ballots among 500 staff at the council's offices in Abingdon, Wantage and Faringdon.

The new agreement was approved by the Liberal Democrat council this week, despite Conservative opposition.

Seventy per cent of staff will enjoy improved pay, 20 per cent will stay the same, but ten per cent will be worse off, with a small number facing salary reductions of up to £7,000. They will have a two-year "cushion" before losing money.

Terry Quinlan, chairman of the council's personnel regulatory and appeals committee, said the existing system was outdated and needed to take into account new legislation on issues such as equal pay. He said: "The process has been going on for more than two years and I know it is frustrating, but it better to take a long time than rush it. Job evaluation is always a difficult problem and, with any system, you get winners and losers."

Mr Quinlan said the new structure was loaded to help staff who dealt face-to-face with the public. He said it was the area where the council had the biggest problems with recruitment and retention of staff.

But Tory group leader Melinda Tilley said: "This will do nothing to solve our recruitment and retention problems. It is unfair and we stand to lose experienced staff. We need to look at this again."

Fellow Tory Peter Saunders wanted an independent human resources consultancy firm to be called in to start the process again. He said the council could find itself with many tribunal disputes on its hands.

But council leader Paul Bizzell said: "We live in a high-cost area and we must adequately reward staff if we are to retain them."

Branch secretary of Unison, the main union at the council, Karen Tolley, said: "We are confident that we have achieved the best outcome for the majority of staff."

She said outstanding issues would be looked at once the scheme was in operation.