Brother and sister pop act Sean and Sarah Smith were a huge hit on the show last year, coming third overall and winning millions of young fans.

The singers from Widley had been waiting patiently for news of their single – set to be released at Easter – and were devastated when it was put back.

But their dreams came true yesterday when they were told they would be releasing an album on Simon Cowell's Syco label and working with pop supremo Pete Waterman.

Sarah, 19, who dropped out of theatre school when she got through to the X Factor, said: 'We were on the train to London when we got the call and I think we probably deafened all the passengers because we were screaming so much.

'We still can't believe it – we are so happy. When the single launch was put back we feared the worst. But now we are totally and utterly ecstatic.'

Work begins on the album within weeks and they will be working with the biggest names in the business. The writers behind smash hits from High School Musical and X Factor star Leona Lewis will be writing new material for them.

It is believed the deal is worth about £1m, although the record company refused to discuss the value.

Music industry expert Mark Desvaux said: 'If the record label spends £1m, I'd expect them to get an advance of five to 10 per cent. The problem is the larger the advance, the longer it will take the label to recoup its costs, which means it will be more difficult for the band to make money in the long run.'