STEELMAKER Corus has cut off a vital lifeline which could have saved thousands of jobs on Teesside, an expert has revealed.

The Anglo-Dutch producer is selling a coil plate mill, mothballed in 2001, to a Chinese company.

The sale is part of a wider move by the firm to eventually offload Teesside operations or close them down, according to the independent analyst.

Peter Dupont has assessed Corus Teesside's potential for success under radical new plans which will see it stand alone as a merchant mill.

Last night, he told The Northern Echo: "In my view, Corus does not want to operate as a merchant mill.

"The most likely alternatives are that it will be sold or closed."

The consultant was commissioned by the Tees Valley Development Company and Redcar and Cleveland Borough Council to produce a report on the chances of steel making surviving on Teesside.

The confidential document, a copy of which has been seen by The Northern Echo, states: "The economics of the proposed Teesside merchant mill could be considerably enhanced by resuming hot-strip production at the site."

The report points out that the coil plate mill could be relatively cheaply resurrected and could produce 1.6 million tonnes of hot-strip metal a year.

That would provide an immediate use for some of the proposed 3.5 million tonnes of slabs and blooms expected to be sold on the international open market.

The report adds: "Hot-rolled coil offers the potential for slightly higher margins than pure semis business."

Mr Dupont predicted that there was a 30 million-tonne market in Western Europe for hot-rolled coils which the merchant mill could take advantage of.

Corus's decision to sell the coil plate mill caused anger in the region.

David Walsh, member of the Steel Taskforce and One NorthEast board member, said: "Obviously the deed is now done. It is a pity Corus did not see fit to talk to the representatives of regeneration agencies and the taskforce.

"We could probably have had a very good discussion about the merits of this move.

"It would have helped if Corus had taken us into their confidence. Unfortunately, that does not seem to be the case."