CHEMICALS group Huntsman was poised to pull out of Teesside if it did not receive Government support for its plans to build a £200m polyethylene plant.

The US company announced this week plans to build the world's largest polyethylene plant at Wilton - a move that has saved 800 jobs at Huntsman's aromatics business north of the Tees and secured between 4,000 and 8,000 jobs across the sector in the region.

Nearly 120 skilled jobs for engineers and technicians will be created at the plant, as well as 1,000 construction jobs during the building phase, which is expected to last two-and-a-half years.

Kevin Ninow, president of Huntsman's chemical and polymers business, said: "As part of the package deal when we bought the site from ICI, there was included a recognition that certain facilities would be shut down and there was provision made for that.

"My job was to determine whether we could salvage these businesses.

"This investment came at a crossroads of either these businesses going down in the next few years, or we make a major investment and make all our operations on Teesside not only sustainable, but competitive.

"We haven't shut down any of the businesses that we bought, and on top of that, this new plant will be competitive on a global scale."

If Huntsman had pulled out, the knock-on effect on other companies in Teesside's chemical cluster could have meant the end for the region's petrochemical industry - which contributes £3.5bn a year to the national economy. The firm's latest investment in Teesside will bring the level of money they have ploughed into the area up to £bn.

Redcar MP Vera Baird, along with regional development agency One NorthEast, was instrumental in convincing the Department of Trade and Industry to give Huntsman a grant.

Most regional selective assistance grants are made on the basis of how many jobs the recipient would create, and civil servants were understood to have been reluctant to give a multi-million pound grant to a facility that would create only 117 jobs directly.

But lobbying by Teesside MPs, unions and One NorthEast convinced the DTI of the importance of the investment to the petrochemical industry and it agreed to back Huntsman with a £16.5m grant.

The plant will produce 400,000 tonnes of low-density polyethylene a year, and will safeguard the future of Huntsman Olefins Cracker plant at Wilton International.

It will be operational by the end of 2007 and will offer the lowest cost low-density polyethylene in the world, apart from plants in the Middle East which have a price advantage on raw materials.