PSA Peugeot Citroen workers have marched through Aulnay-sous-Bois waving banners to protest against the closure of the town's Citroen plant as its last car came off the assembly line.

Opened in 1973, the plant is being shut down next year as the loss-making firm seeks to cut costs.

About 1,000 staff remain at the factory but they have virtually stopped working.

Trade unions agreed yesterday to a wages freeze next year in return for a company pledge to keep plants open, but the closure of Aulnay-sous-Bois was not affected by the deal.

The car-maker said it would save €100 million (£85m) a year with concessions on wages, holidays and more flexible working hours at dozens of French plants.

More than 500,000 manufacturing jobs have been lost in France over the past decade.

The agreement follows months of confrontation between unions and management at the Aulnay-sous-Bois plant.

It obliges employers to negotiate before laying off staff but also lets them make deals with union representatives, ending an obligation to seek the consent of each employee individually.

The new law also forces firms with over 1,000 employees to share more information with unions and give them representation at board level.

"Since this law came into force we've entered a new era," claimed Industry Minister Arnaud Montebourg.

"This progress of social dialogue, toward compromise in companies, is for us a major positive point of the past few months."

Peugeot's rival Renault started to seek temporary wage and working-time deals as early as 2008.

Threatening that it might otherwise shift production to Spain, where pay is lower and terms tougher, Renault has since forced through permanent changes.

Trade unionists have mixed feelings about the deals but some admit the alternative would be bigger job losses.

"The unions always have reservations about these competitiveness pacts," said Serge Maffi of the SIA-GSEA trade union at PSA.

"But given what's at stake, we decided to sign."