Mandelson promise on failing steel plant

Union leaders continued to attack the decision to mothball the Teesside Cast Products site in Redcar, Cleveland, with the loss of 1,600 jobs, and raised the threat of industrial action.

After meeting union representatives, Corus management and Redcar Labour MP Vera Baird, Business Secretary Lord Mandelson said: "Politically, we are not going to walk away from this plant. We stand full square behind it. We will do everything we can to bring it out of mothballing and back into production.

"The reason it is not yet a tragedy is because it is not yet a closure of this plant. This plant will be maintained, its ability to reopen and resume operation will be protected by the company, and I have that assurance from them."

Prime Minister Gordon Brown, in the region for a Cabinet meeting outside London, said the Government was "desperately looking" for new investment in Corus. He said: "I understand the frustration that people feel. There are wonderful workers at Corus.

"This is a good company, this is not a company that should be going under."

He blamed falling global demand for steel, decreasing prices, and in particular the international consortium which pulled out of a 10-year deal to buy the Redcar plant's output.

Mr Brown said: "We are trying desperately to find new investors for the future. We are talking to a number of investors about the future of Corus."

Despite the Prime Minister's comments, Corus issued a statement confirming it would start to partially mothball the steelworks today.

The Unite union's national officer for the steel industry Terry Pye said that the mothballing of the plant was a "disgraceful charade".

He said they would be meeting other trade unions next week to discuss what action to take.