THE firm of administrators handling the winding up of a North-East steelworks revealed last night it was having serious talks with a prospective buyer.

Sheffield-based Poppleton and Appleby said it hoped to make an announcement about the future of the Weardale Steel plant at Wolsingham, County Durham, by the middle of next week.

"We have been talking to a prospective buyer of Weardale Steel for more than a week now," said Jeremy Priestley, the administrator's managing partner. "Representatives of the company have been to Wolsingham to look around the site.

"We regard these talks as positive and a lot of effort is going in to reach a hopeful conclusion."

Mr Priestley said the name of the prospective buyer had to remain confidential, but he did confirm that it was a UK company.

Meanwhile, the last 29 workers, who were kept on by the administrators to complete works on steel castings for customers in Holland and Germany, yesterday joined the 54 others workers already laid off at Weardale Steel.

Mr Priestley said production had now ceased at Wolsingham, but he hoped this would "only be a short-term measure".

Kenny Lally, Amicus shop steward at Weardale Steel, said of the news about a prospective buyer: "It's an enormous lift, not just for all the lads who have been paid off, but for the whole of Weardale.

"This has put fresh heart and hope into the community."