Another 200 North-East jobs could be lost to the cheaper European labour market following a shock announcement today.

Workers finishing their shift at car parts manufacturer Calsonic Kansei's plant in Shildon, County Durham, were stunned to hear that it is to close this summer.

They left work facing an uncertain future, with bosses telling them that production will either be transferred to Washington, Tyne and Wear, or abroad.

Falling sales leading to 'significant losses' are blamed for the shut down which is a setback for the region's fragile manufacturing sector.

Only 15 months ago Calsonic transferred work from its Sunderland plant to Shildon, which then employed 300 people making car heaters. Shildon's MP Derek Foster last night pledged to fight to keep the jobs in the region.

But union boss Davey Hall fears the battle is already lost and called for tighter employment legislation to protect workers' rights.

He said: "I think it is despicable that the company isn't prepared to make forthright announcements about the future of its workers.

"We need stronger laws to prevent employers like this from upping sticks and moving to Europe."

Dave Pallas, president of Calsonic Kansei Europe, said: "The automotive industry is a highly competitive one. In order to meet our customers' price expectations, we have to drastically reduce the costs in our business.

"Calsonic Kansei Group is currently investigating a number of options for future manufacturing or produces currently manufactured in the Shildon site.

"Inevitably this will lead to job losses, although the company will endeavour to retain as many employees as possible in sites located within its European operations."

A Shildon worker, who asked not to be named, said: "We were told that even if we move to Washington, 26 of the 203 jobs will go.

"We didn't know it was coming. There have been rumours for three months but we couldn't get any answers. This was the last day they could give us 90 days notice before the start of the summer holiday.

"They said they hadn't decided what was going to happen. We don't know where we are."

Mr Foster said: "This came out of the blue. I have to accept that Shildon will close and that is a blow, but I have been talking to One NorthEast and the County Durham Development company and we are very determined to keep these jobs in the North-East.

"They are a first class, highly skilled workforce who are held in very high regard by the company."

Almost all the Shildon workers live within five miles of the former railway town. Councillor Kester Noble, lead member for regeneration on Sedgefield Borough Council, said: "This is disappointing news for the employees at the firm and their families and for the town of Shildon because of the loss of local manufacturing jobs.

"The borough council with its partners will work very hard to see what can be done to help the people this affects."