The Teesside-based Darlington and Simpsons Rolling Mills subsidiary will be closed and its operations transferred to other British Steel plants at Skinningrove, also on Teesside, and Mannstaedt in Germany.

Jobs go to Germany

Production will be gradually wound down and be completed by mid-2000 at the latest.

The company blamed the high pound and the cost of meeting environmental and safety standards for the closure decision.

In September the company announced the closure of its Sheffield plate mill and cutbacks at its Pontypool plant in a total loss of 350 jobs.

George goes north

The latest news comes on the day Bank of England governor Eddie George said he would return to the economically hard-hit North to explain comments made earlier this month that sparked controversy in the region.

Eddie George: Rebuilding northern bridges

He was reported to have said at a business lunch that job losses in the region were an "acceptable price to pay to curb inflation".

British Steel said consultation with workers and unions at the Darlington mill would begin immediately over the phasing of redundancies with counselling to be offered to those affected.

A British Steel spokesman said: "This decision has become necessary due to the considerable decline in the markets for many of the hot-rolled products at Darlington and, as a major exporter the profitability of the business continues to be adversely affected by the continued strength of sterling.