More than 1,000 people are to lose their jobs after the closure of an electronics plant was announced this afternoon.

LG Philips Displays is shutting down its cathode ray tube factory on the Belmont Industrial Estate in Durham, with the loss of 761 jobs. The union Amicus estimates that at least a further 200 North-East jobs will go in the wider supply chain.

The site, which makes tubes for televisions, is the largest manufacturing employer in the region after the Nissan plant in Sunderland.

Davey Hall, Amicus regional secretary, said: "This is really disastrous news for the region, as well as the people who are employed at the plant and their families."

Mr Hall said most of the came from the Durham area and the closure represents the loss of about 2.1 per cent of the city's workforce.

The 33-year-old plant has been hit as orders for cathode ray tubes plummeted, in the face of the growing popularity of flat televisions screens.

The company attributed the closure to "crippling price erosion"" and a shift in demand from Europe to Asia.

David Coppock, plant director, said: "The decision is based solely on the continuing adverse business situation and in no way reflects on the performance of the employees here.

"Without their hard work, commitment, flexibility and determination, this plant could have closed several years ago."

Gerry Steinberg, Labour MP for Durham City, blamed the company for the job losses, accusing them of acting like "ostriches".

Speaking at Prime Minister's questions in the Commons, Mr Steinberg said the 800 jobs set to disappear when the factory closes made it a "desperate day for Durham".

And he added: "Philips have known for the last seven years that cathode TVs were becoming obsolete in favour of flat-screen televisions.

"Philips, by acting like ostriches, have let down their loyal workforce by failing to invest in new technology."

The MP urged Tony Blair to ensure "everything possible is done to alleviate the absolutely desperate situation and assist the hundreds of workers who are going to be made redundant in July".

In reply, the Prime Minister agreed the jobs were being lost because of the switch to flat-screen TVs, but declined to add to Mr Steinberg's criticism of the company.

He said he would meet the Durham City MP to explore how to "best make progress", pointing to a local unemployment rate that was "at a 30 or 40 year low".

Mr Blair said: "We will do whatever we can to put an emergency operation in for those workers who may be made redundant, so that we can work with them to provide additional jobs.

"There are other jobs around but obviously those people, particularly skilled workers, will find it difficult. We will absolutely everything we can to help them."

Roberta Blackman-Woods the Labour Party Prospective Parliamentary Candidate for Durham City said: "It is a travesty and a real tragedy for the workers involved, and Durham generally, that LG Philips did not invest in the Durham factory."

Amicus also accused the company of cutting back on development in the UK and mainland Europe, while spending millions setting up a plant in China.

Mr Coppock said: "We've seen a 30 per cent fall in our prices over the past two years.

"The plant has incurred heavy losses and with no sign of recovery, we simply cannot sustain this position any longer.

"Now that this difficult decision has been made, we must do everything we can to support our employees. I would like to put on record my appreciation for everything they have done.

"Durham employees have invested the time and effort that helped us introduce new products, cut costs and remain viable in an increasingly competitive market.

"But finally, the economics of the situation have beaten us. Consumer demand for flat screen technologies and larger tubes in Europe, coupled with damaging dollar exchange rates, has left us no option other than closure."

The joint-venture, set up by Korea's LG and Dutch company Philips, closed its Washington plant last year with the loss of 190 jobs and has also closed its factory in Newport, Gwent.