HOPES of saving 1,100 North-East jobs were dealt a major blow last night when it emerged that the Hibernia Foods group could be broken up.

Frantic negotiations were still going on to find a buyer for the entire group amid fears workers could end up on the dole before Christmas.

The Dublin-based firm manufactures bakery products under licence to US conglomerate Sara Lee.

It also makes chilled desserts under licence to Entenmanns, as well as Mr Brains' meat faggots and its own label products for a number of major supermarkets.

It employs 693 at two own-label product plants in Hartlepool, 400 at another own-label site in Stockton, 550 making Sara Lee and Entenmanns products in Bridlington, Yorkshire, 250 at a chilled dessert factory in Birmingham and 200 at a Mr Brains plant in Bristol.

Until now it had been assumed that the group - which went in administration earlier this month - would be sold whole as a going concern.

However, it has now emerged that the company's Sara Lee factory, in Bridlington, may be sold separately.

Workers fear that without the prestigious Sara Lee brand, receivers may be unable to find a buyer for the rest of the group - leading to its break-up and job losses.

Last night, Hartlepool MP Peter Mandelson, who has been closely involved in the negotiations, admitted there were difficulties.

He said: "After a difficult day of discussions between the various parties, extra talks are now scheduled to take place over the weekend.

"I will continue talking to everyone involved but there will be no clear decision either way until Monday."

Workers have constantly been told that a deal with a prospective buyer was imminent since it went into receivership in October.

But now it has emerged that it is unlikely the licence to make Sara Lee cakes will passed on to the new buyer. Instead, Sara Lee bosses are in talks with another company.

Unions have requested an urgent meeting with Sara Lee bosses and Mr Mandelson has also sent two letters to the company.

Alan Milne, regional officer of the Bakers, Food and Allied Workers Union said that without the franchise hundreds of jobs could be lost.

Mike Knowles, president of Sara Lee's worldwide frozen bakery operations, said: "We are disappointed that we were unable to reach an agreement with one potential supplier who expressed an interest in Hibernia's Bridlington plant."

He added: "Nevertheless, we are now in discussions with a different, UK-based company, who have expressed an interest in buying the Bridlington plant and establish a supply agreement with Sara Lee."