BLACK & Decker is investing millions of pounds in its County Durham factory after receiving a £490,000 Government "sweetener" to stay in the region, The Northern Echo can reveal.

The US company, which shed 1,000 jobs two years ago in a bid to reduce costs by moving to Eastern Europe, had a meeting with regional development agency One NorthEast last month and showed the agency the extent of its investment in Spennymoor.

Improvements to offices and production facilities were put forward as evidence of the company's commitment to stay in Spennymoor and to maintain the workforce of 500.

One NorthEast has now paid the first part of a Government grant, which was agreed two years ago subject to the power tool manufacturer investing in the North-East plant and keeping a workforce there.

Officials will visit the factory again in a year to check investment is continuing and to see if Black & Decker has met the conditions of the deal to receive further cash.

In January, Black & Decker said it was making a small number of staff redundant - leading to fears among workers that the factory would close.

But last night, Ian Williams, head of business investment and finance at One NorthEast, said: "While it is disappointing to see people losing their jobs, the underlying issues there are quite positive, with the company continuing to make investment in the plant.

"Black & Decker is still a significant employer in County Durham and we have given them a substantial sum for an agreed programme of investment with them.

"We are hopeful of this company surviving in Spennymoor into the future."

But he warned that if Black & Decker left the region within the next few years, One NorthEast would reclaim some of the grant, as it did with Samsung when it left Wynyard, on Teesside.

A statement from Black & Decker last night said: "The programme of redundancies has been introduced reluctantly to ensure the plant remains competitive.

"At the same time, the company has been in discussions with both the County Durham Development Company (CDDC) and One NorthEast regarding grants for the Spennymoor operation.

"The first instalments of these grants ... have been received by the company.

"Further instalments will be made available in the coming years, subject to certain conditions being met."