MOTORING organisation the AA last night dismissed speculation that its North-East call centre could close with the loss of more than 1,000 jobs.

A source told The Northern Echo that there was concern that the motoring organisation's recent cost-cutting exercise, with job losses and changes to employees' packages, could lead to its Newcastle insurance centre being shut down in the future.

However, Ian Crowder, of the AA, said: "There is no hidden agenda here and we are certainly not going to close."

The AA had considered off-shoring work to India, with estimated savings of £24m, but decided to stay in the UK and instead put in place an £80m restructuring programme to reduce costs and improve efficiency.

As part of the programme, more than 50 posts were axed at its Newcastle centre in August, with scores more jobs cut in Cardiff.

"It is not on our radar to address the situation of off-shoring again in the future. I'm not saying we will never, ever do it but it is highly unlikely. But who knows what the AA will be doing and who will own it five or ten years down the track," said Mr Crowder.

On Wednesday, the AA, which is owned by two private equity firms following a £1.75bn takeover last October, announced the closure of its final salary pension scheme to new employees.

The GMB union said the AA was also cutting benefits for existing employees, although this was denied by the firm.

Joan Hoggins, of the GMB, represents some of AA's Newcastle workers and expressed concern for the centre's future. She said the group had chipped away at employee terms and conditions.