UP to 260 jobs could be created in a North-East town if proposals for a distribution centre to serve high street stores are approved.

Mastercare Service and Distribution, which serves the Dixons and PC World chains, has applied for permission to build a warehouse in Newton Aycliffe, County Durham.

The facility, part of an ongoing expansion of the Dixons Stores Group, would also house Mastercare's call centre operations.

The group already has a warehouse in Newton Aycliffe, which employs 142 people.

The intention is to transfer all of the existing operations and existing jobs to the new premises, proposed to be built at Newton Aycliffe Business Park.

The group says the move would have the potential to create 261 jobs by 2006.

If the application is successful, the news will be a major boost to Sedgefield borough, which has suffered a series of jobs blows - most recently the loss of 950 workers at Black & Decker, in Spennymoor.

Mastercare is in negotiation with Durham County Council with the intention of acquiring 3.7 hectares of land for the Aycliffe warehouse.

The detailed planning application will be heard by Sedgefield Borough Council's development control committee on Friday, when officers will recommend approval.

Councillor Bob Fleming, leader of Great Aycliffe Town Council, said he did not want to pre-empt the planning meeting, but added: "I would guess that the proposed development would provide a considerable amount of employment at a time when we're losing jobs throughout the borough.

"I think we've got to strive to bring more jobs in and maybe we've got to look at different types of job, not just the manufacturing side. We've got to look at a mixture of jobs."

County Councillor Bill Blenkinsopp said: "I think anything that brings jobs to Newton Aycliffe is excellent and I would welcome it.

"We've just had 60 people laid off at Tallent engineering, so to bring something into the area that is going to create jobs is good news.

"It's not going to be an unsightly building and it will be out of the way, on the trading estate, as it should be. I think it's great for the town."