A GOVERNMENT-backed rescue bid that would safeguard thousands of North-East steel jobs has been ruled out.

Unions had hoped ministers would step in to help to secure the future of the Corus plant at Redcar.

The plant - which employs 2,900 workers - is facing an uncertain fate after Corus management decided it had to earn its keep competing on the international market.

The group has decided it no longer needs the Redcar steel slab products and hopes the plant can find international orders. But the factory faces a massive task competing with cheaper foreign rivals - a fact that outgoing chairman Sir Brian Moffatt acknowledged on Wednesday night.

And industry minister Alan Johnson warned that the Government would not intervene financially to save the company from further plant closures "for the sake of cheap popularity".

He rejected calls from unions for the Government to buy a 'golden share' in Corus in order to preserve a strategically important industry for the nation.

Sir Brian told MPs on the Commons Trade and Industry Committee that there was 'every possibility' of Teesside finding a future in what he said was a growing world market.

"We are trying to avoid closing Teesside," he said. "With the right attitudes, incentives and leadership it should be able to compete."

But pressed by Middlesbrough South MP Ashok Kumar on whether it would still be open two years from now, he said: "I am pretty confident in two years' or three years' time. The question is following that.

"We do think that there is every possibility of creating a competitive business in this area. We don't want to close plants and put people out of work if we can avoid it."

Sir Brian rejected the suggestion of committee chairman Martin O'Neill that his comments offered only a 'stay of execution' to the Teesside plant.

He said: "We do think there is a possibility of Teesside going forward. It is a growing market. The slab market is growing substantially on a world basis."

And he denied reports that Corus had been in talks with a Russian investor who recently bought five per cent of the company over the possibility of importing slab steel from Russia.