Volkswagen's Spanish unit has signed a new contract with most of its workers to end an industrial dispute which began last March.

The contract includes the payment of a EUR1,000 bonus per worker and a 4% wage increase in return for greater working flexibility, a spokesman at the VW plant in Navarre told Reuters.

The 4,100 workers at Navarre, which builds 1,160 Polo models a day, began occasional strikes in March in protest at the company's moves for more flexibility.

Two small unions at the plant have yet to sign the new deal, the spokesman told the news agency.