THE relative weakness of the pound has given steelmaker Corus a much-needed lifeline only days before it is expected to deliver a poor trading statement to the City, a leading economist said.

The possibility of war with Iraq coupled with failing stockmarkets has seen the value of sterling steadily erode against the euro.

Corus UK, which operates sites across Teesside and in Wales, has historically said the strength of the pound made it difficult to competitively export its products.

Jonathan Aylen, senior lecturer at the University of Manchester Institute of Science and Technology's centre for manufacturing, said the currency move could not have come at a better time.

"It is a bit like the Seventh Cavalry riding in in the last reel (of the film) to rescue the beleaguered troops. They must be saying 'There is a God up there'," he said.

Corus is in the midst of a difficult time that has seen thousands of workers laid off and considerable pressure building from creditors for it to raise capital to pay back loans in the region of £1.2bn.

The Anglo-Dutch group's decision to swap from multi-metals to a streamlined, single metal approach has been hindered by opposition in the Netherlands to its proposal to sell its aluminium operation to the French firm Pechiney.

That move would wipe about £540m off its debt - a figure that Mr Aylen said would increase in Corus' favour if the euro continued to perform well.

He said: "This is improving Corus' profitability day by day."

Dutch media had reported that Corus was given a week to sell the aluminium side of the business or it would be refused a new £1.2m.

Corus has denied that the banks were pressuring it to act fast. It declined to comment on how the loan negotiations were progressing.

The steel manufacturer will now have to prove that, given the better economic position it has demanded for so long, it can compete when the pound is down against the euro.

A Corus spokesman last night welcomed the greater parity between the euro and the pound.

He said: "As a company with 80 per cent of its sales in Europe, including the UK, the strengthening of the euro against the pound is certainly good news for Corus."