ADMINISTRATORS trying to find a buyer for a crisis-hit North-East steelworks revealed last night they were in the final stages of talks with a prospective buyer.

They said that after nearly two weeks, negotiations with a Northern company interested in taking over Weardale Steel at Wolsingham, County Durham, were in "a final, delicate stage".

But they would not comment on reports that the prospective buyer was the nearby Bonds foundry at Tow Law.

Bonds' managing director Mark McCarthy also declined to comment on the buy-out rumours.

But he did confirm that his company was completing contracts at Wolsingham on behalf of the administrators. They had taken on 18 former Weardale Steel employees to carry out the work.

The administrators, appointed when Weardale Steel ran into financial difficulties said that the prospective buyers have said they would create "good employment prospects" at the 140-year-old steelworks.

Jeremy Priestley, managing partner with Sheffield-based Poppleton and Appleby, said: "Negotiations with a buyer for Weardale Steel are now in a delicate and final stage, and it's hoped we will be able to make an announcement about the successful takeover of the company very shortly.

Mr Priestley said that talks had taken place between existing customers of Weardale Steel, who were satisfied by proposals to clear the company's debts, estimated at more than £1m.

Weardale Steel was shut down a month ago only weeks after it was taken over by Eastwood Industries, a Midland-based concern.

The Weardale Steel closure, which made the bulk of the 84-strong workforce unemployed, came close on the heels of the shutdown of the Blue Circle cement works at Eastgate, which made 147 workers redundant.

The administrators are also giving careful consideration to a proposed management-led employers buy-out of Weardale Steel, led by former managing director Bill Cooper.

This has the backing of Durham Business Link, local MP and Government Chief Whip Hilary Armstrong and the trade union Amicus, whose shop steward at Wolsingham is Kenny Lally.

Mr Lally said last night: "Whatever happens, the important thing is that steel production continues at Wolsingham and whoever takes over the works gives a firm promise of job security.