MORE than 1,700 workers in the North-East face a more certain future after the Government gave its blessing to the merger of two mail order firms.

Trade Secretary Patricia Hewitt approved plans by the Barclay brothers to merge their March UK (Littlewoods) group with GUS Home Shopping's Shop Direct and the former Kay's Catalogue empire, now known as Reality.

Trade unions were concerned about job losses at both companies if the deal was blocked, fearing they would struggle to survive on their own.

Littlewoods employs 1,492 people in south Sunderland, at one of its two main customer service centres.

In addition, 275 people work in the company's distribution depots in Sunderland, Middlesborough and Stockton.

The two businesses wanted to merge to fight off rising competition from the Internet and catalogue rivals.

The £590m deal was postponed in November, last year, after the Office of Fair Trading referred it to the Competition Commission. A decision was expected by December 23 but only came through last night.

Trade union Usdaw welcomed approval of the takeover, which it supported because it believed the deal would protect jobs.

General secretary Sir Bill Connor said: "This is great news for our members in Shop Direct. Usdaw has always maintained that this deal was in the best interests of the workers."

* A call centre opened by Shop Direct in India in March 2002 is to close and 250 jobs will be returned to Britain in a reversal of the recent tide of work being switched overseas, it was also announced last night.