AN MP has warned of the “terrible” consequences for the North-East if a consortium is permitted to breach a supply contract.

More than 3,000 jobs at Corus on Teesside are at risk after an international consortium pulled out midway through a ten-year sales agreement.

The deal had secured production at Teesside Cast Products (TCP), in Redcar, east Cleveland, until at least 2014, and amounted to an estimated 78 per cent of the plant’s total output.

The Government has vowed to fight to make sure that the consortium, led by Italian magnate Emma Marcegaglia, honours the contract.

Vera Baird, the Labour MP for Redcar said she had written to the group to urge it to keep production on Teesside.

“Steel is a fine tradition in Redcar – it employs a large proportion of the population.

“There are other ways, better ways, of dealing with this situation. We need to make sure the consortium knows that the damage will be monstrous if they do this. It is clearly a breach of contract.

“The socio-economic consequences for Teesside will be terrible.

“I will point out to the consortium members that the Government is involved and that the Prime Minister has said we will do everything we can to make sure the contract is honoured.”

Marcegaglia, and partners Dongkuk Steel, Duferco and Alvory unilaterally decided to pull out of the contract last month, blaming the effects of the global downturn.

Corus bosses spent the next three weeks trying to keep the deal in place, but announced on Friday that a 90-day staff consultation period had begun, with the prospect that the plant could be mothballed.

Geoff Waterfield, the multiunion chairman at TCP, said yesterday that staff would return to work today under a cloud of uncertainty.

“People have to carry on as normal, but that will be harder than it sounds,” he said.

“We really need the Government’s help here. There is still a good chance we can save these jobs. We have been in positions like this before, so we cannot give up hope.”

Speaking to The Mail On Sunday yesterday, Corus chief executive Kirkby Adams said: “They (the consortium) signed a ten-year, legally binding contract. For years they made vast profits out of the deal. Now that steel prices have changed and demand has slumped, they have just dropped it.

“The consortium wanted a divorce no matter what. And the victims are this loyal workforce.”