ELECTRONICS firm LG Philips turned down a £20m Government grant to invest in new technology at its Durham factory, where 760 jobs are now doomed.

The company announced the closure of its Belmont Industrial Estate plant earlier this year.

Hilary Armstrong, Labour candidate for North West Durham, told a hustings meeting: "We offered to LG Philips a grant of £15m to £20m to invest and move to flat-screen technology. They would have been able to work from where they currently were in Durham to create the new technology.

"They took the decision not to accept that money and they have now gone elsewhere."

Ms Armstrong was speaking at a question-time event at Ramside Hall, Durham, organised by the Federation of Small Businesses, and was defending Government help offered to Rover.

One NorthEast has confirmed that it and the Department of Trade and Industry had offered grants to LG Philips in 1999.

Unions this week expressed their disbelief that LG Philips turned down money.

Davey Hall, of trade union Amicus, said: "The criticisms levelled at Philips at the time of the announcement are now even more superimposed in the knowledge that they were given the opportunity to invest in new technology."

One worker, who did not want to be named, said: "It shows that the writing was on the wall for a long time for us."

But plant director David Coppock said the grant had been for widescreen sets, which involved the same process of manufacturing cathode ray tubes.

Another inside source said that despite Mr Coppock's constant attempts to secure funding from Korean parent company LG to update the Durham plant, every request was refused.

Mr Coppock said this week: "At that time in the late 1990s, before the joint venture with LG Electronics, Philips was manufacturing 17 and 21-inch conventional cathode ray tubes at Durham.

"Internationally the company was considering investment in widescreen cathode ray technology, and there were discussions about possible support to deal with this. Durham, which was at that time profitably producing about three million tubes a year, was not chosen to become a widescreen operation."

He said flat-screen operations were never an option at Durham because the technology is different from cathode ray tubes, and so all the investment in flat screens was made in Asia, where the manufacturing assets are.

The LG Philips Displays plant was closed because it was said the demand for traditional tube TVs had collapsed. The company said it would have cost millions to change the factory to flat-screen production, and it would have had to shut for up to 18 months for alterations.

Carol Woods, Durham City Liberal Democrat candidate, speaking at the hustings, said: "If the £15m offered to LG Philips had been spent on small business or skills and education, it would have made a huge difference to our economy."

Speaking afterwards, city Conservative candidate Ben Rogers said: "It is very disappointing that LG Philips rejected this grant. With over a million job losses in manufacturing since 1997, the closure of LG Philips is yet another blow to the region's economy."

Veritas candidate Tony Martin said: "It is so sad to see so many jobs being lost but the truth is that Philips have been looking to run down this factory for some time. The North-East is becoming the poor man of Europe."

Roberta Blackman Woods is defending the Durham seat for Labour at the polls next week.