Marks & Spencer staff claimed victory on Friday after it emerged that the high street retailer had agreed to water down controversial changes to its redundancy terms.

The company, which employs more than 60,000 people, has shelved proposals to cut the maximum payout available to staff made redundant by 25 per cent after being told that the plan had triggered an “unprecedented level of anger” among the workforce.

A proposal to reduce the maximum payout from 70 weeks to 52 weeks has been scrapped and a new cap of 62 weeks will take effect on Monday. This means that a 49-year-old worker with 30 years' service would get £31,000 if made redundant, £5,000 more than under the initial proposals put forward by M&S directors.

The Times revealed last week that the planned changes had sparked a furious staff backlash. A memo from the company's national Business Involvement Group (BIG), the retailer's staff council, had warned the board that employees were convinced that the proposals signalled redundancies. It added that there was “an unprecedented level of feedback, concern and anger” about the new terms.

Paul Kenny, general secretary of the GMB union, said: “I wonder if the leak in The Times influenced the outcome. It looks as if it did.”

M&S vehemently denied the claim and said that it had struck a peace deal with the national BIG before the dispute emerged last week. A company spokesman said that it had been announced only yesterday because the two sides had been ironing out the agreement.

Malcolm Heaven, the national BIG chairman, informed staff in an internal e-mail that their feedback had been invaluable in forcing the company into a rethink. “I would like to take this opportunity to thank those of you that I know have worked hard to gather feedback from colleagues, and it is important you know it was these views that have helped shape the counter-proposal and the subsequent company response,” he wrote.

An employee who blew the whistle on the planned changes to the redundancy terms faces a disciplinary hearing on Monday after being suspended by M&S for contacting the media. The GMB, which plans to defend the employee, urged M&S to “desist from disciplining people who put information into the public domain”.

M&S has been one of the hardest hit by the downturn in consumer spending on the high street. A profit warning last month wiped £1 billion from its share price.

Although the retailer has yielded on the maximum payout available to staff in any redundancy, other changes to the terms and conditions will stand. Anyone aged between 22 and 40 will receive two weeks' pay for every year served if made redundant, instead of 2½ weeks. Staff aged 41 or older will receive three weeks' pay for each year, compared with 3¾ weeks.

M&S says that its terms remain among the best on the high street, claiming that they are equal to those offered by John Lewis and far better than those offered by the Co-op, Next or Arcadia group. A spokesman declined to comment on whether M&S intended to cut jobs.

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