Staff at two Caparo plants owned by Labour peer Lord Paul will begin a work to rule on Wednesday ahead of a one-day strike on 17 July.

All are members of the Iron and Steel Trades Confederation (ISTC) and will continue to strike for one day a week until the dispute is settled.

I hope that a company which prides itself on its family values will see sense and stop this unnecessary action

Michael Leahy, ISTC union

Unions have been warning that workers were prepared to take action to defend final salary pensions, but the ISTC members will be the first to strike.

The factories affected are based in Scunthorpe and Tredegar in South Wales.

The union's general secretary Michael Leahy said workers felt angry and were determined to resist the proposal because it threatened their security in retirement.

He said: "I hope that a company which prides itself on its family values will see sense and stop this unnecessary action."

Lord Paul has said he was baffled by the industrial action because he believed the two sides were still seeking a settlement.

Final salary schemes are commonly seen as the most generous and most secure type of pension because they are supposed to guarantee an income in retirement.

However, the Pensions Advisory Service (Opas) recently warned that staff risked losing their life savings with these schemes if their employer goes bust.