A UNION boss has spoken of his disbelief after one of the region's biggest employers threatened to shift its European operations to China if regulations on carbon emissions are not overhauled.

GMB national secretary Keith Hazlewood said if Corus transferred its steel business overseas it would have a "devastating" impact on the region, and the country as a whole.

He spoke out after Corus chief executive Philippe Varin was quoted in the Independent on Sunday warning politicians to help fund new clean-energy technology - or face the prospect of his company, which employs 3,500 people in the region, quitting the UK.

"I'm very surprised by the comments," said Mr Hazlewood.

"If there is any truth in what he is saying, he needs to sit down with the unions and discuss it and negotiate.

"As far as I know, he has never mentioned that through the discussions we have had. It is news to me. I'm hoping it's not another tactic to get the Government to bail them out."

Mr Hazlewood said he had always respected Corus and had always believed them to be a very credible company, which led him to question the comments that had been reported.

"I hope it's just speculation that has been reported, rather than fact," said Mr Hazlewood.

"It would be devastating for the steel industry and also the UK economy, along with the economies where the steel is being produced."

Corus employs around 25,000 workers in the UK and is in negotiations with unions over pay in an effort to curb large redundancies as the credit crunch hits production.

But at the UN Climate Change conference in Poznan, Poland, Mr Varin said: "If we are forced to buy CO2 credits on the market without a system to improve our production process, then we will not produce steel in Europe.

"To cut carbon emissions of steel production, we need breakthrough technology, but this is extremely expensive, costing £200m to £300m to upgrade a one million ton production plant.

"There is no way for us to fund this and pay penalties for our CO2 emissions. This would wipe out all of our profits and put us at a competitive disadvantage with manufacturers in nations which are not subject to carbon caps.

"The only way forward is through improved technology, but this costs money and a carbon tax is not the answer, because manufacturers will just move the growth to other countries. Not only will that kill European industry, but we will produce twice as much CO2."

And Mr Varin, who is also the chairman of the World Steel Association's Climate Change Policy Group, added: "Our customers will still need steel, so they will have to import from China or another developing nation and then you have the added CO2 associated with shipping."