NSK Bearings last night confirmed it was making more than one in ten of its workforce redundant at a County Durham factory.

The Japanese company, which has had a major presence in the region for nearly 30 years, said it was shedding 85 jobs from its workforce of 600 at Peterlee.

The redundancies - some voluntary and some compulsory - come as NSK invests £16m in the plant, which makes bearings mainly for the automotive industry.

A statement from the company said: "NSK Bearings operates in an increasingly competitive market - one in which margins are continually squeezed by increasing costs, many of which cannot be passed on to customers.

"In order to survive - and thrive - in this market, the company has, sometimes, to make difficult decisions in order to sustain its operations and ensure that there is a long-term future in Peterlee.

"NSK is not unique in that in order to survive, it has to be lean and efficient.

"The company is embarking on a restructuring plan that will see more than £16m invested in Peterlee over the next few years.

"But that restructuring carries with it a cost and, regrettably, that means that over the next 12 months, a number of job cuts will need to be made throughout the organisation."

The workforce was informed about the cuts in February. Twenty-five workers have accepted voluntary redundancy. Another 14 have made inquiries about it.

Following further consultation with employees and unions, there will be compulsory redundancies.

A spokesman said: "NSK is committed to the region. It came here as an investor long before many of the other Far East companies, and has stayed long after many of them.

"The investment means there is more of a future for the significant workforce."

Just over two years ago, NSK shed 95 jobs at Peterlee, moving uncompetitive production lines to a sister plant in Poland.

It was the first job cuts NSK had made in its 28-year history.

The spokesman confirmd that NSK was a Rover supplier, but said that was a "tiny" part of the business and had had no effect on the company and nothing to do with the latest round of job cuts