One of Britain's most famous beer could be brown and out if a cost cutting brewery giant closes Newcastle's historic brewery.

The closure would be the end of Newcastle Brown Ale - known to natives as Old Brown Dog and to the rest of the country as Newkie broon - which has been brewed in the city centre for 77 years.

Financial experts in the City of London have said closing Newcastle Brewery could boostprofits for the owners, Edinburgh based Scottish & Newcastle, by £25million.

But Tynesiders - who say Britain's most popular bottled beer should not be brewed anywhere other than "The Toon" - would be insensed at what would be a hammer blow to the city.

Financial analysts at City of London investment bank Credit Suisse First Boston (CSFB) said S&N might close TWO of its five UK breweries to save money and boost profits.

Research by the bank estimated that the closure of just one brewery from those in Newcastle, Edinburgh, Manchester, Tadcaster and Reading could add £25 million to annual earnings.

While Scottish & Newcastle has refused to comment on the report other than insisting that the Tyne Brewery and Newcastle Brown are "very important" to the company, industry observers say it is not inconceivable that the Tyneside facility could be shut.

Newcastle Brown Ale has only ever been brewed on Tyneside since it first went on sale in 1927.

And despite the fact the beer is protected by the same laws which protect Champagne, brewing industry observer David Liston insisted it was not impossible to produce the beer elsewhere.

Drinks analyst at fund manager Gerrard Mr Liston said: "As long as you have got the recipe and the right facilities, I would imagine you could make any beer where you want.

"Greene King now brews Ruddles in Bury St Edmunds whereas it always used to be brewed in Rutland and they are transferring Old Speckled Hen there as well, so I would not suggest that Newcastle Brown Ale can only be brewed in Newcastle."

Newcastle Brown Ale has protected status from the European Union, meaning it cannot be copied or made anywhere outside the North-East.

To do so could cause serious damage to the image of S&N's iconic Newcastle Brown, which is leading the company's export drive to the USA.

Mr Liston said there was scope for S&N to cut costs by closing one brewery.

"The new management team is looking to increase revenues and one of the things which is an absolute fact is that they have to improve profitability from the UK beer division so they will look at various cost-cutting measures."

The CSFB report and prospects of increased profits at S&N helped to boost the brewer's share price, which closed up 24.5p at 413.5p.

Full story in The Northern Echo tomorrow.