Toyota, the Japanese carmaker, announced a fresh round of cost cuts today as motor industry chiefs prepared to meet with the Government for crisis talks about a £2.3 billion rescue plan.

The company announced plans this morning to cut production and wages by 10 per cent at its plants at Burnaston near Derby, where it employs 3,900 staff and Deeside in north Wales, where it employs 570 workers.

Toyota, which is briefing workers on the proposals today, said the programme would remain in place for a year.

“Following extensive consultation with our employee representatives, and with input from all employees, it has been agreed that the best way to secure long-term employment is to temporarily reduce working hours and base pay by 10 per cent,” Toyota said in a statement.

It added: “This work share arrangement will take effect from April 1 and will be in place for one year, during this time we will continue to monitor the market and company situation closely. We believe the measures we have announced give us a greater opportunity to maintain employment through this difficult period.”

Unions said they were recommending the measures, which they claimed would help to restore stability at the group's UK operations

Peter Tsouvallaris, Unite representative said: "Our members are reminded daily of the tremendous insecurity this recession has brought to our industry.

"Unite’s priority is to secure jobs and give our members a fighting chance of coming through this economic turmoil with their jobs and livelihoods in tact. Any decision to cut wages and working time is never taken lightly but the agreement we have reached with Toyota will ensure none of our members’ benefits are eroded and that these skilled workers will remain in place and at work ready for when the upturn comes.

"Once again, workers in the car industry are demonstrating that they will sacrifice in the short-term to ensure that they, their friends and colleagues can have a future in the years to come."

Toyota has already cut 200 part-time jobs and last week started a voluntary redundancy scheme, the latest carmaker to do so.

The Japanese car giant has said that it will post the first group-wide annual operating loss in its 70-year history. It is predicting a global loss of more than £3 billion and expects its production to fall by about 12 per cent this year.

The latest cuts come as motor industry bosses meet Ian Pearson, the Business Minister, at a summit to discuss how car makers can qualify for the £2.3 billion of loans that have been made available by Government and the European Investment Bank.

The support scheme was originally announced in January by Peter Mandelson, the Business Secretary, and received approval from the European Commission last month.

Carmakers are also pressing the Government to create incentives for motorists to scrap old cars and buy new ones.

This has lifted the market in some countries, particularly Germany, where €2,500 (£2,220) is being offered to motorists under the scheme.

Demand for German industrial vehicles is waning however after Daimler said it will lay off 18,000 workers at its truck plants for several months.

Daimler said the lay-offs would be implemented at four Mercedes-Benz plants and take effect by April 12.

The Retail Motor Industry Federation (RMIF) has been lobbying for the introduction of a scrappage scheme that could help to revive car sales while removing high-polluting cars from the road.

Amid plunging demand for cars, manufacturers in the UK and around the globe have been scaling back production and cutting tens of thousands of jobs.

Aston Martin has cut 600 staff, with employees now on a three-day week, and 1,000 positions are set to go at Jaguar Land Rover.

Honda has shut its plant in Swindon for four months between February and May.

About 300 agency staff lost their jobs at Mini in Oxford, and Nissan and Ford are also trimming staff.

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