Corus'S plans for steelmaking on Teesside were under attack last night for ignoring market trends and being too inflexible.

Michael Leahy, general secretary of the Iron and Steel Trades Confederation (ISTC), cast doubt over the company's business plan to make the Redcar plant a merchant mill from 2006.

He said: "We are concerned that Corus's plans for Teesside are too inflexible and based on a business plan that ignores current and future market conditions."

The indictment came as the Anglo-Dutch steelmaker announced that its restructuring was showing signs of success.

Full-year results showed annual losses were reduced to £305m from £458m last year.

Mr Leahy said the results suggested the company was "moving in the right direction".

He said: "ISTC members employed by Corus have played their part to turn the company around and tackle the problems left by years of mismanagement.

"Today, we are seeing signs that their efforts are beginning to bear fruit."

Corus, which was formed by the merger of British Steel and Hoogovens, of Holland, in 1999, said it had benefited from the global recovery in steel prices, as well as from a better manufacturing performance.

Corus also cut 1,800 jobs during the year, taking employee numbers to 49,400 at the start of this year.

Most of its steel production is now focused on three UK sites, Port Talbot, in South Wales, Scunthorpe, in North Lincolnshire and Rotherham, in Yorkshire.

Philippe Varin, Corus chief executive, said that, on balance, the company was more confident about the outlook for 2004.

The results show turnover rose 11 per cent to £7.95bn, with the increase primarily due to higher volumes and prices in carbon steel. At an operating level, losses narrowed to £66m from £393m a year earlier.

Despite the progress, uncertainty still surrounds the future of the company's Teesside plant, which was deemed surplus to requirements following the company's decision to focus on carbon steel products.

Corus said it was continuing its efforts to refocus the site as a stand-alone exporter, possibly through a joint venture.

Two Russian businessmen, Oleg Deripaska and Alisher Usmanov, have been buying shares in Corus, fuelling speculation they are interested in the Teesside operations.

The company is also considering its options for its aluminium business - a year after plans to sell the division to French group Pechiney for £543m fell through because of opposition from the company's supervisory board.

* Dutch Liberal Democrat MEP Herman Vermeer and North-East Liberal Demo- crat European spokeswoman Fiona Hall announced they are to make a fact-finding visit to Corus's Redcar operation on Monday