Steelmaking in Weardale has been handed a lifeline with the news that a 140-year-old business might be saved.

Weardale Steel in Wolsingham was facing oblivion after a disastrous takeover left more than 80 workers facing a bleak future.

But a meeting of creditors to be held next week is expected to be told that there are potential solutions which would keep the industry alive in the village.

Philip Revill, partner with Sheffield-based administrators Poppleton and Appleby, said: "We are still very hopeful of keeping steel production going in Weardale. Several proposals to take over the company are being considered."

Mr Revill said that the creditors meeting arranged for Wednesday of next week would be a formal one, but his firm would be providing background on proposed ways of saving the company.

Weardale Steel, which has built up a worldwide reputation for its heavy castings for ships, ran into difficulties just three months after it was taken over by Eastwood Industries, a Midlands-based concern.

The Department of Trade and Industry has launched an investigation into the affairs of Eastwood Industries, which had bought Weardale Steel from the Dorset-based Langham group of companies, the owners of the 30-acre site at Wolsingham.

Eastwood paid just £1 for the steel company and its order book.

Around 25 former Weardale Steel employees are still working at the plant, completing orders for overseas customers, mainly in Poland.

"These orders are worth around £1m and it is likely to be well into the New Year before they are completed," said Mr Revill. "Until then, it is unlikely that any firm decision will be taken about the future of the company."

Kenny Lally, shop steward for Amicus until he and other long-serving steelworkers were made redundant, said: "This is a positive announcement by the administrators. There is still a lot of speculation about who is interested in taking over the works, but it is vital that steel production carries on here in the dale."