More than 2,000 workers have gone on strike for a week on a £3bn Bahraini tourist development being built by a team including Bovis Lend Lease and Atkins.

About 2,450 of the 7,000 workers on the Durrat Al Bahrain scheme went on strike last week, days after the Indian embassy in Bahrain demanded a minimum monthly wage of 100 Bahraini dinars (£136) for Indian employees in the country. The Gulf construction industry relies heavily on migrant workers from India and Bangladesh.

Ian Cordingley, Atkins’ senior resident engineer, said: “If half your labour goes on strike, you are bound to have delays.” However, he added that the project’s first-phase deadline for October was still on target.

Michael Nops, Bovis Lend Lease’s project director, said: “It was a matter between the contractors and their workforce, but it seems like the issue has been resolved and wages have been increased.”

Nops said the delay to the project would be “insignificant”. He said: “While people were on strike, others continued work. We’re going to finish the first phase this year.”

About 2,000 workers from local contractor GPZ and 450 from Bokhowa Group refused to work unless their pay was raised. Nops said they locked themselves into their labour camp until their demands were met.

The action is the latest in a number of pay rows to hit British contractors in the Gulf. Four months ago workers in Dubai received a 20% pay rise after taking industrial action.

The first phase of the Durrat Al Bahrain, which is the Gulf state’s biggest tourist development consists of six man-made islands, each housing 172 villas.

When it is complete, the site will house 60,000 permanent residents and will receive an estimated 4,500 visitors a day. It will include an 18-hole golf course, a five-star hotel, a marina big enough for 400 boats, a market and a ferry terminal. The islands are connected to the mainland via five “petal islands”, linked up with a circular bridge.

Bovis Lend Lease is project and construction manager on the 20km2 site, and Atkins is the consultant engineer.

Scott Wilson Architects has just been appointed to work on the golf course.

Work started in October 2004.