UPDATE 2-South Africa's power firm pay deal averts strike

* Eskom says deal to be signed on Monday

* Big mining union says dispute resolved

* Telkom worker strike continues

(Adds Solidarity quote, Telkom workers strike continues)

By James Macharia

JOHANNESBURG, Aug 13 (Reuters) - South Africa's state power firm Eskom said on Thursday it had reached an agreement with unions over pay and a housing policy, averting a strike that could have led to power cuts and hurt Africa's biggest economy.

A wave of industrial action in South Africa in the past few weeks has led to a series of above-inflation settlements, including agreements in the gold and coal industries.

President Jacob Zuma took a firm line on unions this week, saying there was no "pandering" to labour and the threat of a strike at Eskom was part of the normal wage negotiating process.

Unions that helped Zuma rise to power want him to spend more on the poor, a policy that would be economically risky during a recession. [ID:nLB231586]

The settlement averts a strike at Eskom and feared disruptions to the country's electricity grid. Power cuts in early 2008, the result of years of underinvestment in power generation, shut down mines and factories.

Last week, concern over the power strikes hit the rand -- already feeling the impact of waning global appetite for risk and signs the economy may be slower to recover from its first recession in 17 years.

Eskom said in a statement the parties involved in the wage talks were meeting on Thursday to finalise the substantive terms of the agreement, which it said would be signed on Aug. 17.

Eskom said it had agreed with the three unions involved on a salary increase of 10.5 percent backdated to July 1 this year.

South Africa's biggest union, which called off a strike against Eskom over wages set for Thursday, said its members had agreed to the wage deal. The National Union of Mineworker's (NUM) members comprise the largest number of employees at Eskom.

"The Eskom dispute is finally resolved, the offer on the table on pay increases and housing has been widely accepted by our members," NUM spokesman Lesiba Seshoka said.

Seshoka said a housing policy and allowance would be implemented before Dec. 1 this year. The unions' initial demand was for a 14 percent rise, about double the inflation rate.