A payout by major building companies to “blacklisted” workers has been welcomed by the mayor of Tower Hamlets.

Mayor Lutfur Rahman said the decision by eight construction companies to compensate 3,200 employees whose names were on an industry black list was a “fantastic result”.

The companies’ offer comes after the GMB general union published a list of companies using private investigators to make a database of people it considered union activists.

The database was then used by the companies to run background checks on and deny work to those people.

The companies - Balfour Beatty, Carillion, Costain, Kier, Laing O’Rourke, Sir Robert McAlpine, Skanska UK and Vinci plc – have since apologised for their actions.

Mr Rahman said: “I congratulate the GMB, Unite and construction workers union, UCATT, for their campaign and this great achievement.

“Tower Hamlets was the first local authority to pledge not to award contracts to any company found guilty of blacklisting.

“I am pleased that our support for their campaign to win justice for blacklisted workers has helped achieve this fantastic result.”

Len McCluskey, general secretary of Unite the Union, said:

“Tower Hamlets is blazing a trail by becoming the first London council to stamp out blacklisting.

“This is a fantastic development and we commend the council for their positive action.”

Paul Kenny, GMB general secretary, said: “The GMB is delighted that Tower Hamlets is the first council in Britain to run the blacklisters right out of town.”

Steve Murphy, general secretary of construction union UCATT, added: “Tower Hamlets has a long and proud tradition of standing up for the rights of workers.

“UCATT congratulates Mayor Lutfur Rahman and Tower Hamlets council on extending that tradition with this anti-blacklisting pledge. “It is now incumbent on all other local authorities to follow Tower Hamlets lead and stamp blacklisting out once and for all.”