Workers at one of the region's biggest defence factories which had been threatened with closure were this afternoon celebrating a management decision securing the plant's future.

Jubilation at the announcement that the Royal Ordnance Factory at Birtley, near Gateshead, was to remain open was tempered by news that half of the workforce of 300 would be shed through "natural wastage" and voluntary redundancies.

The decision by factory owner BAe follows months of uncertainty and campaigning by residents, union leaders and politicians.

The company, which makes shell casings, blamed cheap foreign imports for the cuts, although it had a full order book up to 2010.

Welcoming the news, operations cell manager Steven Kingsley, 26, said: "I have been working here since I left school at the age of 16. I can no look forward to a long-term future at Birtley."

Making the announcement, BAe managing director Clive Richardson, said: "Following a detailed review by a joint management and trade union working party, we will embark on consolidation of operations on the site and invest in the component manufacturing facility there."

He said shell forging and cartridge case manufacturing would cease at the plant.

Furthermore, under the agreement with trade unions, a phased redundancy programme will start at the end of this year and will be completed by 2006 _ with a 150 jobs to go.

Mr Richardson said: "From financial point of view the argument for closure was still the strongest, but of course we run a business for lots of reasons not just for accounting reasons.

"I am confident that we have found a way forward that will continue to allow us to continue our operations at this facility."

Sid Robson speaking on behalf of the joint trade union and management team said: "We welcome this decision. It is now in all of our interests to work with the company to ensure the continued operation of Royal Ordnance here on this site at Birtley.

"We thank all those who gave aid and advice in this campaign _ special mention must be made to the local population, businesses, council, cross-party support who organised and participated in the petition presented to Parliament.

GMB full time official Stephen Tompkins said: "It is a massive amount of relief today. This has been going on for a long time, but we are delighted with the decision."

Durham North MP Hilary Armstrong welcomed news but said disappointed about job losses.

She said: "The threat of closure has caused distress and uncertainty for the workforce and their families and I am pleased that they can now plan ahead."

She added: "I will be meeting with Lord Bach, the minister for defence procurement and will continue to raise the matter of the plant's long-term future with him."