MORE than £5bn of potential investment in the chemical and pharmaceutical industries could be threatened if the Government does not allow Teesport to expand, industry leaders warned last night.

The warning came as owner PD Ports revealed it was being taken over in a £246m deal by a consortium of investors, which has pledged to continue campaigning for expansion of the Tees facilities.

The North-East Process Industry Cluster (Nepic), which represents the interests of hundreds of companies, estimates that between £8bn and £10bn of investment could be pumped into the process industries in the North-East in the next ten years.

Because the port is such a crucial point - handling 65 per cent of the chemical and pharmaceutical sectors' goods for export - more than £5bn of the total could be threatened if the Government allows southern ports to expand instead of Teesport, it is claimed.

Regional development agency One NorthEast last night said it was lobbying for port expansion through the Government's Northern Way strategy, which aims to close the £29bn output gap between North and South.

One NorthEast, along with the port's owner, wants the Government to halt expansion at ports such as Felix-stowe and Harwich, and instead allow it to invest £300m in a deep-sea container terminal on Teesside.

This would allow goods to be shipped in directly and exported to Europe and the Far East - crucial markets for the chemical and pharmaceutical industries.

Stan Higgins, chief executive of Nepic, said: "The port is absolutely crucial.

"The way we do business is changing. We have more and more specialist industries whose goods are shipped by container, not by tanker.

"We have £8 to 10bn of potential investment we hope is coming to the North-East, but 65 per cent of that is reliant on export.

"We could potentially see more than £5bn of that investment put at risk if the port doesn't expand."

Nepic said the process industries represent 25 per cent - or £8bn a year - of the region's economic output, which is worth £32bn a year.

Mr Higgins said: "Teesport, of any European port, is the best located for the expansion of Europe.

"If we are going to take goods to and from Poland, Lithuania, Russia, we would take it through the Baltic or take it across to Rotterdam and drive it across Europe.

"Which is the best located port for both those areas? Teesport.

"They are finding now they have a strategic advantage for our port and a strategic advantage for our process industries, which could really make a difference to this region."

John Holmes, director of regeneration and tourism at One NorthEast, said Teesport had been identified in its regional economic strategy as one of the key locations for investment in the next decade.

"The successful development of Teesport as a deep sea container port is of national significance," he said.

"As such, One NorthEast is backing PD Ports' proposal to invest £300m in a deep-sea container terminal on the Tees. The project could deliver 600 direct jobs and 7,000 indirect jobs over the next five years, equivalent to 50 per cent of current unemployment in the Tees Valley."

PD Teesport managing director David Robinson said: "The process industry, steel industry and port industry are all closely linked, and if there is a significant investment proposal for one it will impact on the others.