HUNDREDS of textile workers face a gloomy future after the region's economy was dealt another blow yesterday.

Clothing manufacturer Sara Lee Courtaulds has announced it expects to close its factory in Tindale Crescent, Bishop Auckland, County Durham, with the loss of 340 jobs, in October.

Ten further jobs will be lost at its sister plant in Peterlee, where 27 workers were laid off in March.

The failure to secure a new contract to make clothes for Marks and Spencer's designer Autograph range has led to the decision.

Roger Preston, chief executive of Courtaulds' womenswear division, said: "We greatly regret having to make this proposal but we must recognise the competitive pressures we face.

"If the proposal is confirmed, we will provide help to employees to find alternative work or opportunities for retraining."

Derek Cattell, GMB union regional organiser, is consulting the company and employees to try to find a future for the factory and to look after the workers' interests in the event of closure.

"Everything must be done to find an alternative," he said. "This is a real shock. The factory has survived for over 40 years and reinvented itself several times."

The mainly female workforce was last night trying to come to terms with the news and the prospect of hunting for employment in a job-starved area.

Senior shop steward Gail Johnson said: "We're absolutely devastated. Loads of women here have families to support and there are single mums facing an awful struggle.

"I would urge Marks and Spencer and Sara Lee Courtaulds to look again and see if the decision can be reversed. It angers me when profit is put before people time and time again," she said.

Mrs Johnson also said the workers fear the work will go overseas.

Meanwhile, Wear Valley District Council has called an emergency jobs summit.

* The Government yesterday ruled out a rescue bid for the threatened Redcar steel plant, which employs 2,900 workers. It is facing an uncertain future after Corus management decided it had to earn its keep competing on the international market.