Thousands of jobs in the West Midlands were secured yesterday after a bitter row was settled between Land Rover and KPMG, the administrative receiver of parts supplier UPF Thompson.

The Ford subsidiary broke the deadlock by agreeing to buy UPF for an estimated £16m in a move to guarantee further deliveries of chassis for its Discovery model.

Both sides said they were happy with the terms of the deal and tried to bury the dispute - which went to court - by saying each had shown "professional conduct" throughout the negotiations. But they made clear later they were still at loggerheads over some of the issues.

Land Rover said it did not want to see other British manufacturers "held to ransom" by administrators and wanted to see the insolvency regulations changed.

KPMG "completely rejected" the need for changes in the law saying it had merely done its job - to get the best price it could for creditors. It argued that Land Rover was partly itself to blame for the crisis by hammering down prices so far that UPF's future had been threatened. Around 60% of UPF's work comes from Land Rover where it is the sole chassis builder for the Discovery.

The administrator had been called in to save UPF but had failed to find a firm buyer. KPMG told Land Rover that UPF would be forced to cease operations unless the vehicle manufacturer itself stumped up £62m to take it out of receivership.

Land Rover refused, and chief executive Bob Dover warned that he could be forced to halt production and find another chassis supplier hitting his own staff and those of 200 supply companies.

Land Rover claimed that 1,400 jobs at its own works in Solihull, 550 at UPF and 10,000 at other suppliers were at risk as a result of the actions of KPMG.

If Land Rover had been forced to switch to a third party to supply chassis for the Discovery it might have meant the production line could have been out of action for nine months, it said.

Roger Oldfield from KPMG said Ford had cut prices so far that "something had to give."