A NORTH-East manufacturer, hit by cuts to the UK defence budget, has welcomed the Government's decision to keep an armoured vehicle it supplies with tank tracks for the next three decades.

County Durham engineering firm Astrum, Weardale's biggest employer with 250 staff, makes the tank tracks that the Army's Warrior armoured vehicles run on.

Yesterday the Government announced a £1bn upgrade of the vehicle to extend its service life through to 2040.

In June Stanhope based Astrum said its UK business had been hit by last October's Strategic Defence and Security Review, which will see an eight per cent cut in Ministry of Defence (MoD) spending over four years, and it was facing up to making up to 25 redundancies.

However the firm has contracts with the MoD to supply the tracks for both the Warrior vehicles and Challenger tanks

Astrum has also worked for the MoD for 40 years and is one of only a handful of businesses to achieve the ADS Supply Chain SC21 award, which recognises excellence in the aerospace and defence market.

Last night Astrum managing director Phil Kite said: "Extending the life of the vehicle is really good news for us.

"We are the original manufacturers of the track system on the Warrior fighting vehicle and it has proved to be extremely durable and reliable in tough terrains.

"We are pleased they are extending the life of the vehicle because our track is on it and it extends future opportunities for Astrum.

"The track performs exceptionally well so I am sure it will continue to be utilised."

Yesterday's announcement was made as Prime Minister David Cameron and Defence Secretary Philip Hammond visited Lockheed Martin's UK plant in Bedford, which has won a £642m contract to carry out about two-thirds of the upgrade work.

Mr Hammond said: "Not only is this fantastic news for the Army, it also represents a great boost to British industry - sustaining jobs, skills and capability within the UK's armoured vehicle sector.''

The vehicles will be fitted with a new turret and 40mm cannon, which will allow them to fire more accurately while moving.