THE North-East's economy suffered one of its darkest days yesterday with the loss of 1,500 jobs.

LG Philips Displays announced it was closing its Durham plant, with 761 redundancies.

The news will have a direct effect on the regional supply chain, mainly small engineering firms, where a further 200 jobs will be cut.

Meanwhile, banking group Abbey also confirmed it is to close its call centre in Gateshead this month, making 235 workers redundant. The move is part of cost-cutting measures as it sheds 3,000 staff nationally.

The Amicus union claimed up to another 250 jobs are to go at three other companies in Gateshead and Northumberland.

Davey Hall, Amicus regional secretary, said: "It is the blackest day I have known in terms of job losses in the region."

The LG Philips plant, which makes cathode ray tubes for televisions, will cease production in July. Remaining work will go to the company's new plant in China.

The closure represents the loss of about two per cent of the city's workforce.

The 33-year-old plant has seen orders for its tubes plummet, in the face of the growing popularity of flat screen, or LCD, televisions.

Lew Dawson, 62, who has been at the plant since it opened, said: "I saw the first tube made here and it looks like I will see the last one as well."

Mr Dawson, who was due to retire in July, said the workforce recognised the shut-down was inevitable.

Another worker, who asked not to be named, said: "I feel like I have been thrown on the scrap heap.

"I am in my 50s and am going to struggle to find another job."

The Durham plant is acknowledged to be one of the most productive in the company.

It has one of the lowest goods return levels, much less than the company average of 1,000 parts per million - and one line is below 200 parts per million.

David Coppock, plant director, said: "The workforce has given fantastic commitment.

"But we cannot compete with the likes of China on price."

Gerry Steinberg, Labour MP for Durham City, blamed the company for the job losses. Speaking at Prime Minister's Questions in the Commons, Mr Steinberg said: "Philips have known for the last seven years that cathode TVs were becoming obsolete in favour of flat-screen televisions.

"Philips, by acting like ostriches, have let down their loyal workforce by failing to invest in new technology."

Tony Blair pointed to a local unemployment rate that was at a 30 or 40-year low.

He said: "There are other jobs around, but obviously those people, particularly skilled workers, will find it difficult."

In the past, the plant has had more than £5m of Government assistance. But in 1999, the company turned down an offer of further cash.

Amicus accused LG Philips of cutting back on development in the UK and mainland Europe, while its LCD arm has spent millions setting up a plant in China.

Mr Hall said: "They have never invested properly to secure the future of the Durham workforce.

"Most of the employees come from the Durham area, and this will have a huge impact on them and their families."

The company, a joint venture between Korea's LG and Dutch firm Philips, closed its Washington plant last year with the loss of 190 jobs and moved production to Slovakia. It was awarded grants of £220m to create 6,000 jobs with a plant in Newport, South Wales.

But it created only 870 jobs and shut down in 2003.

Durham County Council was last night establishing a response group to help tackle the closure's impact on the local economy.

Amicus also claimed other jobs were under threat - 90 at soap pad manufacturer Rhodes UK, in Cramlington, Northumberland; 80 at micro-switch maker Saia-Burgess, in Gateshead; and another 80 at TT Electronics in Bedlington, Northumberland. All three firms declined to comment.

David Allison, director of business and industry at development agency One NorthEast, said: "It has been a poor day for the North-East today.

"We have a good track record.

"With Samsung, we managed to get people straight back into work, so we are optimistic we can do the same thing here."