BRITISH American Tobacco is to close its last North-East plant with the loss of more than 500 jobs - plus hundreds more in associated businesses.

The company has decided to pull the plug on its Rothmans operation in Darlington after a global review of its operations.

The news comes only months after the announcement that the nearby Torrington engineering works is to closewith the loss of all 104 jobs within the year. The workforce had already been streamlined from 400.

Although BAT refused to confirm the Rothmans closure plan last night, The Northern Echo understands the announcement could be made as early as this afternoon.

The decision to switch UK production to factories in Eastern Europe and the Far East signifies the end of Rothmans' production in the North-East. Two years ago the company closed its manufacturing plant in Spennymoor and a packing plant in Peterlee.

It will send shock waves throughout a regional economy already reeling from a series of manufacturing closures.

Ironically, senior economists and regional development chiefs are due to meet on Teesside for a manufacturing summit today. The Rothmans announcement is sure to be top of their agenda.

It will overshadow the release of a regional manufacturing plan at the Samsung Centre on Wynyard Park, Billingham, this morning.

One NorthEast - the regional development agency- has known of the impending closure for some time and will no doubt have already drawn up plans for a response.

Yesterday, it refused to comment on the prospect of hundreds more redundancies, preferring to wait for the official announcement by BAT.

The news is disastrous for the 500 workers employed directly in Darlington and hundreds more within the company's supply chain and the wider economy.

The cigarette factory had always presented a dilemma for Darlington MP Alan Milburn in his former role as Health Secretary.

Politicians urged BAT to think again. Local councillor Ian Haszeldine said: "This is tragic. I knew there was something going on.

"There was rumours that they were in negotiations with the Chinese, who are the biggest buyers of cigarettes in the world. There was some deal going on but we could not find out whether they were going to make production in China or over here."

Leader of Darlington council John Williams said: "If these rumours are correct, this will be a major blow for Darlington and the region.

"Should it happen we will be working closely with the company, One NorthEast and everyone involved to ensure the blow is softened."

BAT's head of media relations, Tom Roberts, yesterday travelled to Darlington but refused to be drawn on the reason why.

He said: "As far as we are concerned this is nothing but speculation and BAT never comments on speculation."

Gerry Hunter, regional organiser with engineering union Amicus, said he had not been advised of the closure. He said: "If the news is true we would be absolutely devastated.

"There is the loss of Torringtons in the town and what with everything else that is happening in the region this would be another blow.

"A lot of people would be happy to see tobacco manufacturing close in the region but Rothmans is the jewel in the crown. It would be tragic."

In the past decade, BAT has made a conscious effort to shift production abroad. Cigarette consumption in Britain has been declining for decades - the new growth areas are Eastern Europe, Africa and China.

Mr Roberts added: "Our employees know there is a review ongoing but no final conclusions have been reached. We said we were going to communicate with employees but we have not got conclusions we can communicate today."

The announcement will be the blackest day for jobs since Black & Decker's announcement that it was to slash 950 staff from its 1,400-strong workforce in Spennymoor.

It opted to move the bulk of its production to the Czech Republic in order to cut manufacturing costs.

That prompted The Northern Echo to launch its Working For A Future campaign which aims to help rebuild the regional economy.

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