NORTHUMBRIAN Water bosses last night welcomed the sale of the company to a consortium of institutional investors by French owners Suez as a boon for the North-East.

The £2.2bn deal will see the firm, which has main offices in Durham and Chelmsford, return to the stock market for the first time since 1995.

And managers have pledged there will be no impact on jobs or levels of service for the group's 3,650 employees and 4.3 million water and sewage customers.

This includes Northumbrian Water Limited, which employs 1,500 people who work on water supply and waste water treatment in the North-East

Managing director John Cuthbert said: "This is great news for Northumbrian Water and its customers and staff in the North-East.

"The quality of the institutional investors who have committed significant funds, along with the decision of Suez to retain a 25 per cent equity stake, demonstrates the significant interest and confidence in our business.

"Northumbrian Water was the first privatised UK water and sewage company to be bought, the first to be merged, and now it is the first to be returned to the stockmarket.

"It is also a boon for business in the North-East, with another major company listed on the London Stock Exchange."

The deal was arranged by a consortium which included stockbroker Collins Stewart and financial advisor Deutsche Bank and Ecofin.

The new owners have asked Sir Fred Holliday to remain as chairman and the existing senior management team under Mr Cuthbert.

Sir Fred said: "The consortium has come up with a truly innovative solution which provides Suez with fair value and allows it to take part in our future success, while enabling a group of blue chip institutional investors to take a direct stake in our leading UK water company."

A company called Aquavit was formed by the consortium for the acquisition and will be renamed Northumbrian Water Group plc.

As part of the deal, Aquavit will also acquire Kielder Reservoir, in Northumberland.

Also included in the group are Northumbrian Water Limited's sister companies Entec UK, Fastflow Pipeline Services, Analytical & Environmental Services (AES), Lyonnaise des Eaux (Gibraltar), Ayr Environmental Services, and Caledonian Environmental Services.