A £5m office development on the site of a former wool factory could bring up to 1,000 jobs to the region, The Northern Echo has learned.

The developers of Lingfield Point in Darlington, the site of the former Paton and Baldwins factory, which was built in the 1940s, yesterday announced the latest phase of development.

Marchday said the phase will be known as Memphis and will offer 150,000 sq ft of office space with capacity for up to 1,000 staff.

Although no companies have signed up for the new office space yet, Marchday is confident enough to invest the £5m following successful lettings at previous phases of development on the site.

The latest phase of the Lingfield Point development follows on from recent lettings to business services organisation Capita, which brought 400 staff to the site, the NHS and Four Seasons Healthcare and the conversion of The Beehive, a former dance hall, into studio offices.

John Orchard, director of Marchday, said: "Memphis will be a low energy, modern office building. There are not many buildings that can offer 150,000 sq ft on one level in the North-East."

Lingfield Point is a 110-acre development situated just off one of the main routes into Darlington.

The land around the Memphis development will be landscaped by Battle McCarthy.

David Jackson, of agents Sanderson Weatherall, said: "Memphis will be unique to Darlington and offer accommodation which will be ideally suited for the needs of today's modern businesses. The single floor layout is a real boon."

In the past few years, Marchday has invested millions in developing the complex into a modern business park. It now has more than 30 businesses and 1,400 people working there.

The whole long-term development at Lingfield Point, off the town's McMullen Road, is expected to cost about £120m.

Lingfield House was formerly home to Europe's biggest wool manufacturer, Paton and Baldwin's, which remains there in the form of Coats Craft UK.

Paton and Baldwins amalgamated its UK operations on the site in 1947, with more than 1.7 million sq ft of factory and office space being created and two canteens seating more than 2,000 people.

When the estate fell into receivership in 1998, it was bought by the Marchday Group, through Lingfield Investments, which is now transforming its fortunes.