Ford's image has again been damaged by the latest developments in the investigation into alleged racism at its Dagenham engine plant in east London.

The Commission for Racial Equality has put on hold its inquiry. Ford has given assurances it would comply with stringent conditions for improvements within a tight timetable.

Ford was warned by the commission in January that it needed to stamp out racism following accusations of harassment at the plant.

Jac Nasser, Ford Motor Company chief executive, was pulled into the controversy last autumn and met senior union officials.

Following a meeting with CRE commissioners, Ford of Europe chairman Nick Scheele said: "I want to stress my own personal abhorrence of unfair discrimination and to underline again Ford's global policy of intolerance and harassment of any kind. The diversity of our people is a key strength for Ford."

Mr Scheele denied the controversy was linked to its decision to cease car building at Dagenham. The allegations relate to the engine building section which is in line for further investment from Ford.

Mr Scheele has agreed with the CRE the terms of a diversity and equality review of its race equality practices by October 13. The review must be completed by April.

Ford must work with the CRE in developing a strategy to implement change identified by the review, and set out an action plan for improvement.

Fast track procedures for dealing with discrimination and complaints by staff have been promised by Ford. * Unions have urged Ford to move production of Volvo to Dagenham rather than build new facilities at Ghent, Belgium.