The future of bus firm Alexander Dennis has been “secured” by a £4 million furlough scheme, John Swinney has said.

The First Minister announced the move on Monday in hopes of avoiding the firm pulling out of Scotland and consolidating its operations at a single site in Yorkshire and saving 400 jobs.

The furlough scheme – the first of its kind to receive Scottish Government backing – will kick in when the firm signs a new order and will act as a “bridge to future”, supporting staff between the signing of a deal and the beginning of work.

Under the agreement, 80% of wages will be covered by the Scottish Government, while the company will pay the remainder, with the scheme funded for up to six months.

Speaking to the PA news agency at the Alexander Dennis site in Falkirk, the First Minister said: “I want to do everything I can in whatever circumstance to protect employment within Scotland, and especially manufacturing employment, because that generates significant wealth in the Scottish economy.

“I gave the company a commitment back in May that we would leave no stone unturned in finding a way through this with the company if they remain committed to manufacturing here in central Scotland.

“The company has demonstrated that commitment.”

He added: “I’m very confident that Alexander Dennis has got a positive outlook on orders and on business, that’s a change in situation from earlier on in the year, and what the Scottish Government is providing is essentially a bridge to the future to allow the company to realise and deliver on those orders.”

The furlough scheme could be cut short if work begins earlier than the 26-week limit, the First Minister added.

Alexander Dennis president and managing director Paul Davies told a Holyrood committee earlier this year the firm would need to secure between 70 and 100 bus orders by the end of the year as well as between 300 and 400 next year to be viable.

Responding to the news, Mr Davies said the company was “deeply grateful”.

“This announcement marks a turning point. The Scottish Government’s support allows us to propose a new outcome to our statutory consultation,” he said.

“This has been made possible by collaboration, determination and a shared belief in the value and future of domestic manufacturing.”

While new Scottish Secretary Douglas Alexander said the UK Government had been “leading intensive work” to save the jobs on the site.

“I warmly welcome Alexander Dennis’s decision which will see the company’s Falkirk and Larbert sites remain open and operational. This will be relief to the talented workforce,” he said.

“The UK Government has been leading intensive work with partners, including the Scottish Government, and actively encouraged the furlough scheme that has been announced today.

“Future orders are key to the long-term success of companies like Alexander Dennis.

“Alongside Mayors who have delivered thousands of orders, we will continue to do all we can to support our domestic bus manufacturers.”

The Scottish Tories welcomed the announcement, but MSP Stephen Kerr urged the Government to ensure the move “protects jobs in the long-term”.

Meanwhile, the trade union Unite’s general secretary Sharon Graham said: “The immediate priority is now to secure new orders for Alexander Dennis which will protect hundreds of highly skilled jobs for years to come.”