POLICE confirmed last night that they were treating as arson a major fire which broke out at a North-East factory this week.

Meanwhile, the management at E&R Polymers, on the former Ever Ready site near Stanley, County Durham, have revealed that losses could amount to half a million pounds.

The fire, which broke out in the storage area of the plant at 8.30pm on Wednesday, destroyed more than 4,000 bales of rubber and 50,000 litres of oil.

Tackled at its height by more than 70 firefighters, the fire spewed out a column of smoke, which could be seen from Newcastle, more than ten miles away.

Detective Sergeant Vic Deanes said: "We are treating the fire as arson.

"Fire brigade investigators have said there were no natural sources of ignition in the compound that could have started the fire.

"The nature of the rubber also suggests it had to be caused deliberately.

"Some form of accelerant would have had to be used to set it alight."

Det Sgt Deanes said children were known to play in the storage area, using the rubber as a trampoline.

He said police were keen to speak to the driver of an S-registered Bedford flatbed truck, which was seen in the area, at about 6pm on Wednesday.

Det Sgt Deanes said: "We are not suggesting the driver had anything to do with the fire, but he may have seen something and may be able to help and we urge him to get in touch."

Site manager John Meredith said the plant, where production resumed yesterday, would be evaluating the its security arrangements.

He said: "We have had a number of problems with children who have had to be chased away from the storage area.

"We will be conducting a complete risk assessment on how we can make the premises more secure."

Mr Meredith said it was coincidental that a sister plant in Glossop had suffered a similar - though smaller - fire two weeks ago, when youths climbed over a fence to set skips alight. Arrests have been made.

Anyone with information can call (01207) 232144.