Terry's chocolate factory closure will cost 316 jobs

The announcement came after the GMB union issued a statement saying it had been told there were no viable options that would keep the factory open.

Kraft Foods confirmed the confectionery manufacturing plant and warehouse would close and production would move overseas. The company, which has been making chocolate in the area for 240 years, announced in April that it intended to move work to Belgium, Sweden and Eastern Europe.

The GMB had hoped the company would move production of Chocolate Orange and other sweets to a purpose-built factory in the York area.

The factory will close at the end of next year.

John Pollock, director of the York plant, said: "Following the acknowledgement by the unions that it was necessary to move from the current site, we recognised that it would be difficult to produce an alternative plan for the continued manufacture in York that would be sustainable, manageable or financially acceptable. We have explored all these challenges in depth in our discussions with the unions.

"Our focus is now to move forward with our employees and to offer all the support we can between now and eventual closure."

Kraft Foods, which makes brands including Philadelphia cream cheese, Kenco and Maxwell House coffees, Terry's All Gold and Toblerone, said it hoped to preserve the heritage of the Terry's factory and its connection with the city.

GMB organiser John Kirk said he was bitterly disappointed by the outcome.

York City Council said it was already looking at changing the use of the site and said it hoped the future of the site would generate more jobs than were provided by Terry's.

Council leader Steve Galloway said: "The York economy is in a much stronger shape to cope with these job losses than it was five or ten years ago."

The Terry's site, in Bishopsthorpe Road, has already attracted interest. It could be worth £50m if released for residential development, but York City Council said the site was earmarked as an employment site.