STEEL maker Corus has scotched fears of imminent UK job losses, but a council chief is calling for continuing vigilance.

Huge lay-offs were feared as the price Dutch steel managment wanted to exact for the sell off of the Anglo-Dutch group's aluminium business.

Leo Bendsen, chairman of the group's Dutch supervisory board, has called for the millions realised from the sale to be spent on job investment in Holland.

He reportedly called on Corus to 'structurally' tackle 'over-capacity' in the UK rather than spend the money on attacking Corus's £1.2bn debt.

Reflecting bitterness felt in Holland over the merger in 1999 of British Steel and Dutch steel maker Hoogovens, he allegedly said Hoogovens was in danger of becoming Corus's cash-cow.

Hartlepool MP Peter Mandelson said he would be following up with Corus Mr Berndsen's comments in order 'to ensure these moves are not made at the expense of jobs on Teesside.'

A Corus spokesman on Teesside said: "Mr Berndsen was expressing his personal views. UK jobs will not be a condition of the supervisory board's approval that this goes ahead."

Coun Dave Walsh, leader of Redcar and Cleveland Borough Council, said: "It's good news, but obviously we have to be vigilant as it's clear there are people out there who see further closures and job losses as being on the agenda."

Middlesbrough South and East Cleveland MP Ashok Kumar said: "It is good news that Corus's main board have kept their nerve."

Redcar and Cleveland Council covers Corus's Redcar/Lackenby complex and special sections unit at Skinningrove.

Tony Poynter, chairman of the multi-union steel committee on Teesside is confident the proceeds of the aluminium deal with French company Pechiney will be used to reduce the group's debts.

He said the Dutch had taken their position because the aluminium business is based in Holland and Germany.