HUNDREDS of jobs in Darlington could be at risk after the UK's biggest general insurer made a takeover bid for roadside recovery company the RAC.

Aviva, which owns the Norwich Union insurance company, has bid £1.1bn for the RAC, which has part of its insurance operations in Darlington.

The RAC has agreed the deal, which would involve Aviva shedding 1,700 jobs in both companies across the UK.

But a rival takeover bid could scupper Aviva's plans.

An Aviva spokeswoman said it had not been decided exactly where the jobs axe would fall, but it was more likely to be in parts of the businesses that overlapped each other.

RAC Insure, the insurance arm of the company, has its call centre operations in Darlington, employing about 300 people.

And about 300 people are employed in an Aviva call centre in Newcastle.

Aviva said that some of its back office operations, which include call centre staff, would be moved offshore.

It is expected that the merger of the operations could achieve savings of £80m-a-year by next year.

Meanwhile, Prime Minister Tony Blair yesterday vowed to do all he can to find new jobs for workers at a doomed Durham factory.

LG Philips Displays announced last week that it was closing its Durham plant, with the loss of 761 jobs.

A delegation from the factory, which makes television tubes, met with Mr Blair in Downing Street earlier this week.

Plant worker and union convenor for Amicus, Kevin Blakelock, said: "The Prime Minister was clearly concerned at the plight of the workforce."

The plant is due to close in July. Proposals to help the workforce find new employment include an in-house jobs centre and careers advice service, that will be launched next month and will be on site until September.

Yesterday, Newton Aycliffe's largest employer, TKA Tallent Chassis, announced it was making a £13m investment in its factory with plans to create 120 jobs by next year.