BAE Systems' decision to merge its newly-acquired Alvis operations with its land defence operation RO Defence may create jobs in the region.

Unions have expressed concerns about the future of the Alvis plant at Telford, near Wolverhampton, which is expected to close with the jobs transferred to the Alvis Vickers plant in Newcastle.

BAE Systems, which bought Alvis for £355m in June following an 11th-hour bid, has consolidated it with RO, formerly Royal Ordnance, which also has a division in Birtley, Tyneside, to create the land systems business.

The consolidation will become BAE' s land defence operation, to link with its sea and air defence divisions, and will make tanks, guns and ammunition for land combat.

A spokesman for BAE Systems said it was too early to say what the merger would mean in terms of jobs, but trade union Amicus, representing workers, said it believed Newcastle was the preferred site and Telford was likely to close.

That could mean hundreds of jobs being created in Newcastle to replace the Telford division.

The BAE spokesman said: "In the long-term, we believe this merger will make a more successful business - it was a necessary move to compete more effectively.

"This move will make the company one of the top four in the world, and it will have more funds available for research and development to bring on new products."

The new business will be under the leadership of Ian King, group managing director of customer solutions and support, and Land Systems.

He said: "By bringing together Alvis and RO Defence, our aim is to create a leading land systems business.

"The combined capabilities of this new business enhances our ability to provide customers with efficient solutions and places us in a strong position for bidding on future programmes."