The Welsh Labour government has welcomed a union’s decision to “avert an immediate crisis” by cancelling strike action at Tata Steel.

Members of Unite were due to stage an all-out strike next Monday, but the industrial action was cancelled after the company said it would be forced to cease operations at the site earlier than planned.

The union has been embroiled in a dispute with the company over plans to close the two blast furnaces at its plant in Port Talbot, south Wales, and switch to a greener way of steel production, which needs fewer workers.

Speaking in the Senedd on Tuesday, Jeremy Miles, the cabinet secretary for economy and energy, said he was pleased that unions had worked to “avert an immediate crisis”.

He said: “I am very pleased that all involved have now found a way forward to de-escalate the situation and that meaningful talks between the unions and the company will now continue.”

However, he said the Welsh government remained concerned about the “speed of the proposed transition”, believing the company could have put in place a “longer, fairer transition” which minimised job losses.

The Welsh government minister also said the impact on “downstream plants” at Llanwern, Trostre, Shotton and Caerphilly is still unclear and “clarity must be given as soon as possible”.

Conservative MS Sam Kurtz also welcomed the cancellation of the strike.

He said: “An early closure would clearly have been bad news for Welsh steel production, for the workers, and for the communities.

“We also, naturally, welcome any discussions that bring both the steelworkers and Tata to the table to safeguard how jobs can be supported in the short and medium term.”

But Mr Kurtz questioned if Labour was only giving “false hope” with its promises of a £3 billion green steel plan for the UK if it wins the General Election, questioning how much would go to Port Talbot.

Mr Miles responded: “I don’t think it’s helpful to talk at this point in terms of false hope. It’s a very, very difficult situation, for many, many thousands of people.”

He added that how the £3 billion fund was used was a “matter for negotiation with steel companies” and not for the government to dictate how it is spent.

Following the announcement of the cancellation of the strike on Monday, a Tata spokesperson said the company would stop the early cessations of operations of the final blast furnace – Blast Furnace 4 – which will instead close in September as originally planned.

They added: “The resumption of discussions with the UKSC (steel committee) will progress from the position reached in the last meeting of May 22 and will focus on the future investments and aspirations for the business, and not on a renegotiation of our existing plan for the heavy-end closure or the enhanced employment support terms.