A WAGE subsidy scheme would not save the Corus steelworks because its losses are simply too great, the company insisted yesterday.

Corus killed stone dead the proposal, put forward by the region’s MPs last week, dismissing a claim that it could save the Government up to £30m in unemployment benefits and lost income tax.

John Bolton, managing director of Teesside Cast Products (TCP), said the calculation failed to take into account the losses the plant would make if the decision to mothball it was reversed.

In evidence to the North- East Select Committee, in London, he said: “Whoever subsidised the steel operation on Teesside would face the same fundamental business challenges that Corus has had over the last 12 months of subsiding the operation.

“What are you bridging to and subsidising for? You need to have something to bridge to, or it is difficult to see how providing subsidies for wages would enable us to move forward.”

Minister for the North-East Nick Brown insisted that Corus’ determination to close TCP, rather than EU rules on state aid, left it hamstrung.

He said talks were continuing with potential steel buyers, but added: “I mustn’t get people’s hopes up. I have not given up, but the chances are slim.”

The Northern Echo revealed on Friday that the committee was backing a study, carried out by the Tees Valley Unlimited development body, which argued that a two-day per week wage subsidy scheme could rescue the Redcar plant.

Its evidence said the subsidy would cost the taxpayer as little as £10m over six months – a quarter of the expected £40m bill for throwing workers on the dole.

But Mr Brown said those figures were hotly disputed by the Government because it assumed none of the workers would find other jobs.

Committe chairwoman Dari Taylor, the MP for Stockton South, accused Corus of failing to invest in the boom times.

Last week, Corus confirmed it was delaying the mothballing of TCP until the end of next month, when about 1,600 workers face redundancy.