AN energy firm’s decision to axe troubled North-East factories could cost more than $1bn.

Air Products has dropped its energy-from-waste business, which includes two part-built plants near Billingham, Stockton.

In a second quarter trading update to March 31, bosses revealed the discontinuation of their energy venture cost about $946m (£650m), which included a $32m (£22m) hit from severance costs.

However, they added a further $100m (£69m) charge could follow to wind down the plants and settle contracts.

Officials say the factories, beset by technical issues, would have delivered 100 jobs and generated energy for about 100,000 North-East homes by burning waste destined for landfill.

However, the US company earlier this month admitted the developments, on Tees Valley enterprise zone land, near the North Tees Chemical Complex, would be halted after tests showed it would cost too much time and money to rectify mechanical problems.

The Northern Echo understands Air Products is looking for a buyer.

Only weeks ago, the firm issued a strong rebuttal over claims its Tees Valley One factory (TV1) was being mothballed.

However, it later confirmed work had been suspended, just as it was last year on the sister Tees Valley Two (TV2) development, when about 700 workers were laid-off with severance pay.

TV1 was planned to open later this year and had latterly been providing work for more than 140 people, including 20 contractors.

The company said discarding energy-from-waste will provide greater opportunity to bolster its industrial gases division.