Tata Steel has guaranteed that its flagship UK steelworks in Port Talbot, South Wales, will remain in operation for at least five years and that £1 billion will be invested there over the next decade.

The future of the Port Talbot works has been in doubt ever since Tata Steel announced in March that it was putting its UK businesses up for sale.

Now steelworkers in South Wales can breathe a sigh of relief and the British Government can rest a little easier, safe in the knowledge that, for now, more than 4,500 jobs have been saved.

Gareth Stace, director of UK Steel commented: “This news will bring great relief to the workers involved, their communities and the wider industry and is a testament to the dedication of the work force and company to find a solution. The drive to save our steel sector must not end here though. This good news must now be backed up by Government through a long-term strategic plan, firmly embedded within a wider industrial strategy, that secures the future of the thousands of livelihoods and businesses relying on this critical industry.

“Action is still required in a number of areas such as the disparity in electricity costs and business rates. As we have seen today though, much can be achieved when we pull together and we look forward to continuing to work with Government to ensure a positive long-term future for the wider steel sector in the UK.”

In Wales, First Minister Carwyn Jones has welcomed the agreement between Tata and the unions, describing it as a massive step towards securing the long term future of steel making in Wales.

The Welsh Government is today providing over £4 million for skills and training; the first element of a wider package of support for the company.

The skills and training package will help secure the future of Tata plants in Wales by developing staff, improving succession planning and facilitating the transfer of skills from the mature workforce to younger employees.

The First Minister described the investment as proof of the Welsh Government’s confidence in the long term production of steel in Wales and commented:

“This is great news for the future of steel making in Wales and a massive shot in the arm for the industry. The Welsh Government has worked tirelessly over the past year to find a sustainable way forward and ensure the plants did not close and this announcement is a big step forward.

“I am pleased to announce today over £4 million to develop skills and training for Tata employees, while we have also made significant progress towards defining a wider package of support for Tata to secure the future of steel making in Wales.

“This has been a long and taxing year for the Tata employees, their families and the wider Port Talbot community. I am pleased there is more certainty for the future. Steel workers and their families can now look forward to Christmas and face the New Year with increased confidence and security. Meanwhile today’s announcement also provides the much needed shot in the arm ”

The Economy Secretary Ken Skates said: “This skills package is not only good news for the Tata plants in Wales, but also the individual workers who have worked so tirelessly over the past year to sustain steel production here.

“It demonstrates our firm commitment to do all we can to secure the future of the Tata plants in Wales and our belief that steel making here has a sustainable future.

“Our investment in this programme is one of a number of ways in which we are demonstrating our commitment to the future of steel production in Wales and our determination to support in any way we can.”

David Cheetham of analysts XTB.com commented: "News in the past hour that Tata Steel has guaranteed its Port Talbot site will remain operational will come as a welcome tonic to the UK government. The announcement will hopefully bring to an end eight months of uncertainty for thousands of workers at the firm's flagship steelworks and will obviously come as a huge relief to them and their families. Whilst the majority of workers to benefit from today's news find their employment in Port Talbot, other plants who also stand to benefit from the deal include Hartlepool, Trostre and Shotton.

"However, a slight blot on the good news is the fact that workers are still to agree to pension changes and these will now be put to a ballot. The current pension scheme is a defined contribution with a maximum of 10% from the company and 6% from employees, and it is quite likely that the terms suggested in the ballot will be far less favourable for workers and in turn reduce the future liability of the employer."