A 72-hour tube strike that threatened to cripple London's transport network was narrowly averted yesterday when Tubelines, the company at the centre of the dispute, upped its pay offer to workers during last-ditch talks.

Commuters and holidaymakers had faced three days of travel chaos from midday today, with the Piccadilly, Jubilee and Northern lines expected to be severely disrupted by the walkout of 1000 members of the RMT transport union over below-inflation pay rises. But at the last, Tubelines raised its offer on a two-year deal to 4.99 per cent this year and Retail Price Index inflation plus 0.85 per cent from April 2009.

A second 72-hour strike, planned for September 3, has also been called off as the union puts the pay offer to a vote, with a recommendation it be accepted.

But union bosses warned that if members rejected the deal, the September strike would still go ahead as planned.

“There has been some hard negotiating going on today, and the RMT executive has agreed that the resulting new package that Tubelines has put on the table should be recommended to our members,” RMT general secretary Bob Crow said.

“The union has therefore this evening agreed to suspend tomorrow’s strike to allow a referendum on the offer to take place by the beginning of September.

“If the deal is rejected, strike action will be put back on."

Mr Crowe hit out at what he described as "hostile media coverage" of the planned strike, congratulating RMT members for the "unity and commitment" they had shown in the face of such pressure.

While Boris Johnson, the Mayor of London, refrained from getting involved in the dispute, he criticised the RMT for holding Londoners "to ransom ... over a relatively trivial dispute".

The offer includes a minimum £1,000 salary increase for lower paid grades and apprentices, while points technicians will receive an additional increase of £3,000 in their basic salaries in addition to the 4.99 per cent in year one of the deal.

The company also offered to increase the travel subsidy from home to place of work from 80 to 90 per cent from April 2009, gave a commitment to pursue with Transport for London over the provision of Oyster Cards and agreed to separate discussions on a range of other issues.

It was also announced today that Mr Johnson is to continue to chair the TfL board. He had been due to hand over the role to Tim Parker this September, but has decided to carry on himself after Mr Parker announced his resignation yesterday morning.

“Over the last few weeks, however, it has become increasingly apparent to both of us that the nature of the decisions that need to be taken are highly political and there is no substitute for me, as the directly elected Mayor, being in charge. There are limits, therefore, to what can be delegated,” Mr Johnson said.

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