Beleaguered steel manufacturer Corus will have to cut £35 off the cost of each tonne of liquid steel produced to make up for its failed merger with Brazilian firm Companhia Siderurgica Nacional (CSN), it emerged last night.

The collapse of the bid to acquire its own iron ore mine to drive down production costs forced Corus to reinforce its original plan - stringent tightening of the money belts - which saw 6,300 jobs go in Britain, including 1,100 on Teesside last year.

The planned savings on steel production prices will mean the equivalent of the Teesside steel plant wiping £280,000 a day off its costs.

Last night, Corus stressed that the details of the drive for efficiency had still to be finalised and the savings were not necessarily being pushed through on Teesside, which is widely accepted to be a core area of business.

The Anglo-Dutch company had planned to plough £300m into buying the mine as part of a £2.8bn deal with CSN, and would have recouped £250m a year after an initial three-year period.

Financial analysts were, in the main, sceptical about the deal and welcomed its demise. But they were concerned that Corus issued a statement at the same time announcing its UK arm was struggling to return to the black as swiftly as hoped.

Corus played down the significance of the failed merger. A spokesman said: "We can now concentrate our time and efforts on returning the UK steel industry to profit.

"We want to reduce our costs by £35 per tonne of liquid steel."

But the repercussions are clear, and for the time being, Corus will still be operating in the red - a situation reflected by a lack of confidence from the stock market where the firm's share price slipped 6.5p yesterday to 27.5p after losing 27 per cent by mid-afternoon trading on Wednesday.

The analysts are keeping a close eye on Corus's efforts to rediscover its path to profit.

Anthony Platts, assistant director of Wise Speke in Middlesbrough, said: "On the bigger picture, we were never terribly keen on the Brazilian union, it was not a good move.

"When they pulled out of it we thought that was good news. Unfortunately, they sneaked out the trading statement which was not good news.

"Teesside is the main core business, which is what they have to rely on, so we do not see any downsize implications for that. But the steel business is struggling, particularly with the sterling-euro exchange rate and US steel tariffs."

A spokesman for the Teesside plant said last night that there were no plans for further redundancies, and added: "Corus is continually reviewing its operations and is always looking to increase efficiencies.

"We have already paid close attention to cost and quality in manufacturing areas and will continue to focus on these.

"Business wide, we will look to implement general improvement programmes to add greater value to the company.

"These initiatives will involve building closer working relationships with our customers and looking at downstream opportunities. Smarter use of systems and procedures will help us improve overall efficiency."