The announcement that SeaDragon plans to cancel a £300m oil and gas platform on Teesside was met with fury yesterday, with Tees Alliance Group threatening legal action to preserve the investment and 1,000 jobs promised for the region, and Government intervention being called for.

Deputy Business Editor Deborah Johnson reports.

DURING a time of global recession, of almost daily redundancies and of little optimism, the SeaDragon 1 project – the largest of its type in the UK for more than a generation – was a definite ray of light for Teesside and the wider region.

With more than 200 jobs already created at Haverton Hill on the £300m oil and gas platform project and up to 800 more to follow as work progressed over the next two years, SeaDragon 1 stood as a perfect example of projects that continued to thrive through the gloom.

The fact that a global offshore operator such as SeaDragon should choose to base one of its flagship projects in the North-East – chosen ahead of scores of other bids from around the world because of its “world class” reputation and facilities – was yet another cause for optimism.

And the suggestion that the Cayman Islands-based company should also consider creating subsequent rigs on Teesside – in an investment that could total nearly £800m – was further reason to be confident going into the future.

That SeaDragon should now decide to desert the North-East in favour of a supposedly cheaper Far Eastern alternative was always going to be a bitter pill to swallow.

And that Lloyds TSB, almost half-owned by the UK taxpayer, should be one of the key factors behind the decision, by refusing to continue to finance SeaDragon 1 in the North-East, makes the situation all the more hard to take.

Last night, the region’s politicians, business groups and directly-affected parties spoke of their disappointment.

Frank Cook, a vehement supporter of the SeaDragon 1 scheme and MP for Stockton North, led the charge against Lloyds TSB, and called for intervention from the Prime Minister and Business Secretary.

“I first wrote to Lord Mandelson shortly after his appointment as Business Secretary, stressing to him the importance of this project – one of the biggest non-military construction contracts to be awarded in the UK in recent years – and the need for continuing financial support,” he said.

“Unfortunately diary commitments prevented him meeting my request for a meeting at that point, but I now believe we have reached the stage where immediate Government intervention is needed.”

Tony Sarginson, regional manager for manufacturers’ organisation EEF, also expressed his disappointment.

“Lots of companies we speak to have moved work to the Far East and similar countries only to find out that it’s not actually as cheap as it first appears and it’s also very difficult to monitor progress,” he said.

“Consequently, they often bring the projects back to the UK.”

Last night, one worker at the Haverton Hill site said he had been left shocked by the announcement, which was made to staff yesterday morning.

“Naturally, we are all very worried about our jobs and have no idea what’s going to happen. Hopefully, we will find out soon, as this is no time to be out of a job,” he said.

“We have been working on this for about a year, and 4,000 tonnes has already been completed.

For us now to hear that all this has been for nothing, on a project we are all really proud of, is a real kick in the teeth.”