The country's biggest trade union federation, the FNV, is to disband and reform under a new name with a new leadership, the 19 member unions decided at the weekend.

The federation had been divided since its leader, Agnes Jongerius, voted in favour of measures to reform the pension system, much to the fury of the three biggest member unions: the general workers union Bondgenoten, civil service union Abvakabo and construction workers union FNV Bouw.

'The key is to create a union movement which is close to the people and offers space to the diversity which characterises the Dutch labour market, with all its different forms of employment contract,' Herman Wijffels, who helped end the conflict between the union members, told a news conference.

New movement

Neither Jongerius, or Henk van der Kolk, leader of Bondgenoten and strongest opponent of the pension deal, will be eligible to lead the new federation which will be known as De Nieuwe Vakbeweging - the new union movement.

Bernard Wientjes, leader of the biggest employers' organisation VNO-NCW, told Nos television he hoped the FNV would relaunch itself as soon as possible.

'The sooner there is a new federation... the sooner there will be new mandates and the better it will be for the Netherlands,' he said.

Pensions

However, Wientjes said he did not think the pension deal could be reopened. 'It is a done deal,' he said. 'The deal is in place and should be put into practice as soon as possible.'

The pension deal paves the way for an increase in the state pension age to at least 66 and to allow corporate pensions to vary in line with stock exchange developments.