A job-starved dale was last night celebrating the rescue of a steelworks which has dominated its industrial base for more than 140 years.

A new company is expected to take over the troubled Weardale Steel works at Wolsingham, County Durham, next Tuesday morning.

According to the new owners, the Newcastle-based Anglo-Swedish group, only "a few niggle problems" now stand in the way of their bid to ensure that steel-making continues in Weardale.

Anglo-Swedish's managing-director, Les Graham, told the Northern Echo: "We are now in the final stages of taking over Weardale. Only a few niggling problems need to be sorted out.

"But I expect to be behind my desk at Weardale Steel on Tuesday morning."

Mr Graham said that initially the company would be employing a "smaller more compact workforce." But he added: "We expect this to grow substantially in the very near future."

He said that Anglo-Swedish had agreed to buy not lease Weardale Steel from the Dorset-Based Langham group of companies. But he would not reveal the sum involved.

He envisaged that much of the specialist steelmaking, such as fabricating ships' rudder horns and sterns, would carry on at Wolsingham, along with Anglo-Swedish orders for boiler repairs and pipe-making .

But although it would be owned by Anglo-Swedish, the Wolsingham company would continue to trade as Weardale Steel, said Mr Graham. Meanwhile, 21 former Weardale Steel workers, who were kept on to complete overseas orders, worth £1.4million following the collapse of the company six months ago, will be paid off next Monday.

They were employed temporarily by the nearby Bonds foundry at Tow Law to complete the work on the directions of administrators Poppleton and Appleby, of Sheffield.

Philip Revill, senior partner with Poppleton and Appleby, said yesterday: "Negotiations for a new company to operate Weardale Steel are now at an advanced stage. We will be making an announcement in the very near future."

Weardale Steel ran into difficulties following a disastrous takeover last October by Midlands-based Eastwood Industries, who paid the Langham group just £1 for the Wolsingham company. The takeover is still being investigated by the Department of Trade and Industry.

Former steel workers still looking for work, last night welcomed the news of the expected takeover.

Kenny Lally, former union shop steward, is just one of the 85-strong former workforce hoping to carry on working in the steel industry. He said: "This is the best news we have had here in the dale for months. I only hope it ensures that Weardale Steel lasts for another 140 years."