HOPES of saving a North-East textiles factory were dashed last night when talks collapsed.

Clothing manufacturer Sara Lee Courtaulds confirmed that its plant at Tindale Crescent, near Bishop Auckland, County Durham, will close on October 10.

The shutdown will leave up to 350 employees out of work, including ten at a sister factory in Peterlee, and takes the number of job losses in Wear Valley to 822 since January last year.

It had been hoped that a contract to produce Government clothing or investment from two private firms would offer a lifeline.

But eight weeks of talks failed to secure a deal, and Sara Lee Courtaulds yesterday served 90 days notice of the factory's closure.

The company first announced the plant's possible fate in May when the factory lost its only contract to produce the exclusive Autograph range for Marks & Spencer, which will take the work abroad to Morocco.

Derek Cattell, regional organiser for the GMB union, said: "We had hoped that something would come of possible Government contract or that a private investor would be able to use the site. This is devastating news for the staff.

"In the last 12 years the UK clothing industry has collapsed, 12,000 of our members used to work in textiles - now there are less than 3,000."

One 28-year-old machinist at the firm said: "We've all got mortgages to pay and families to bring up, I don't know where more than 300 people will find jobs."

Steve Llewllyn, chief executive officer for Courtaulds Clothing Division, said: "We greatly regret having to make this decision.

"The UK clothing industry continues to face severe competitive pressures and unfortunately there are no realistic alternatives for us to continue manufacturing at this site.

"We will provide help to employees to find alternative work or opportunities for retraining."

Wear Valley District Council held an emergency jobs summit last month.

Deputy council leader Neil Stonehouse said: "This is a bitter blow for the workers and the area as a whole. We need to be able to retrain workers and offer them jobs in different fields that have security."

Bishop Auckland MP Derek Foster said: "It is very disappointing that no rescue package is available. I shall ensure that everything possible is done to assist workers displaced."

l The GMB has apologised to the workers for its "insensitivity" in offering Marks & Spencer gift vouchers as an incentive to join the union.

Mr Cattell said: "The staff were among 600,000 on the mailing list."