TATA Steel has written-down the value of assets, including part of its North-East business, by a whopping £500m.

The write-down relates to the impairment of goodwill - an intangible asset which includes the value of brands, patents and customer loyalty - on the long products division, which includes Tata's Teesside Beam Mill, at Lackenby, near Redcar, and the Skinningrove special profiles plant, in east Cleveland, where it employs a combined 700 workers.

It comes as Tata is in advanced talks with US billionaire Gary Klesch over a proposed deal to offload the loss-making long products business. Tata last year signed a memorandum of understanding with the Switzerland-based Klesch Group ahead of a proposed sell-off of all or parts of the business, which includes a rail consultancy in York and distribution sites in Teesside and Newcastle.

A decision on the sell-off deal is expected in the coming weeks.

In total, Tata Steel employs about 1,300 people in the North-East out of a total UK workforce of 17,000. Mr Klesch previously played down job fears, saying he understood industry challenges.

The impairment announced yesterday also included a write-down of projects in Africa and Canada as the economic viability of the schemes has become uncertain at the current level of commodity prices, the firm said.

In the meantime, the boss of Tata Steel in Europe has written to UK workers amid a ballot on strike action over proposals to close the British Steel Pension Scheme.

Workers have been urged by union chiefs to strike, and if they walk out, will join the first national dispute in more than 30 years.

A Tata Steel spokesman said: "We started discussions with our UK unions last year about the need to modify our final salary pension scheme because of the scheme's increasing deficit. The unsustainable growth in the deficit is mainly due to people living longer and low returns in the financial markets.

"We proposed modifications to the final salary pension scheme which would have enabled it to remain open to future accrual.

"However, agreement could not be reached with the unions which prompted the start of a consultation process on proposals to switch the majority of UK employees to different, though still very competitive, pension arrangements.

"We are now fully consulting with employees about these proposed changes. This consultation provides opportunities for employees to comment and express opinions that they wish the company to consider. We will consider employees’ views before making a final decision.

"Tata Steel remains open to unconditional talks with the unions to find resolutions to the very substantial challenges facing the pension scheme."

The ballot closes on May 29 with a result expected within a week.

The company has insisted that the vote will have no impact on the ongoing talks with Mr Klesch.