A Darlington engineering company yesterday confirmed it has decided against a move abroad, in favour of pledging its long-term future to the region.

Earlier this year, it emerged that Whessoe Oil and Gas was considering ending its 215-year association with the town.

The company was understood to be looking into relocating to Dubai when the lease on its main site in Brinkburn Road runs out later this year.

But yesterday, the company announced that it would stay in Darlington - and become the first tenant in the £17m Morton Palms development, on the edge of the town.

The move will be completed in October, securing the jobs of the 135 workers, and paving the way for more than 50 positions to be created by 2010.

Whessoe took the decision to preserve its North-East roots thanks to an investment package put forward by regional development agency One NorthEast and Darlington Borough Council.

One NorthEast offered Whessoe a £525,000 "selective finance for investment" grant to clinch the deal.

Business chiefs last night hailed the firm's decision as a major fillip for the regional economy.

Whessoe managing director Jon Dale said: "Over 85 per cent of our business is outside England and we looked long and hard at relocating to the Middle East, or another international location. However, when we considered the package offered in Darlington, it stacked up very well."

Borough council leader Councillor John Williams said Whessoe was "leading the way for more regional, national and international companies to see Darlington and its new businesses parks as an attractive base".

Morton Palms developers City and Northern will start work on the £6m second phase of the project shortly, after recently completing work on two large office blocks.

Whessoe will occupy one of the blocks, called the Hackworth House building.