A firm at the centre of allegations about employing illegal Chinese immigrants has announced it is to cease trading next month, making 68 workers redundant.

The news is a further blow to Hartlepool after The Northern Echo revealed yesterday that another 80 jobs were under threat in the town.

Woo One, in Brenda Road, Hartlepool, supplied fellow Korean company Samsung, at Wynyard, near Billingham, which last month announced it was to close with the loss of 420 jobs.

Woo One is under investigation over claims it was employing illegal immigrants from China and paying them only £2.48 an hour.

Yesterday, managing director Kevin Boynton said the directors of Woo One UK hope to win new contracts and resume trading by the end of the year.

If they are successful, staff will be given the opportunity to return.

The company, which makes computer casings, received a £150,000 Regional Selective Assistant grant four years ago to diversify into making microwave parts. Woo One, which supplied Samsung, may be forced to return the money to development agency One NorthEast if it is found to have employed illegal immigrants.

The news it is to stop trading follows revelations that US-owned Eastman Chemical Company is considering scaling down or closing its Hartlepool operation, which employs 80 staff.