The owner of British Airways has backed a compromise deal that will limit the number of job cuts at Spain's ailing carrier Iberia to just over 3,000.

International Airlines Group, which was created from the merger of the two airlines in 2011, originally proposed 3,800 redundancies but has accepted a government-appointed mediator's recommendation that 3,141 workers should go.

The response of Iberia's unions to the revised proposals, which include severance pay of 35 days a year rather than 20, is still not known.

IAG chief executive Willie Walsh said recently that Iberia "must adapt to survive", having made a loss of 351 million euros (£303.5 million) last year.

But despite three months of negotiations, no agreement on a way forward has been reached between the airline and its unions. Iberia workers have already held two strikes and are planning further industrial action this month.

The company said: "The board of IAG has met in an extraordinary session to analyse and assess the proposal issued by a mediator regarding Iberia. As a result, the board has decided to accept the proposal."

Mr Walsh has argued that BA is already seeing the benefit of recent structural change as it posted profits of 347 million euros (£300 million) in a year when it bought and integrated regional carrier BMI.

Hefty restructuring charges and the write-down of Iberia's assets meant the group as whole slumped to a loss of 997 million euros (£862 million) in 2012.

The Press Association, photo by NATS Press Office