RAIL engineering firm Jarvis could be poised to take over Thrall Europa's York wagon-works of Thrall Europa.

The company, which has a rail division in York, is believed to want the Holgate Road site when Thrall moves out next year.

A Jarvis spokesman neither confirmed nor denied the rumours yesterday, saying only: "We could well be making a move to look at it, but it's a long way off if we are."

The news came after confirmation that 260 Thrall workers will lose their jobs in December. Trinity Rail, Thrall's parent company, said the works would close when a five-year contract with English, Welsh and Scottish Railways (EWS) was completed.

Tony Bennet, City of York Council's assistant director for economic development, said Thrall had yesterday agreed proposals for Future Prospects and Job Centre Plus to provide a package of help for the workers who will lose their jobs.

He said he had been trying to broker talks between landowners Ashtenne and prospective rail industry tenants, in the York area.

Another meeting would take place with Ashtenne within the next two weeks, he said.

Trinity Rail president Chris Schmalbruch said he had had talks with businesses within the rail industry, but there were no concrete plans regarding the future of the site, which Thrall leased from Ashtenne.

He said the company would need time to move off the site and clean it up and it would probably be vacant in the new year.

Chief executive of the York Inward Investment Board Paul Murphy said: "We stand ready to market the site nationally and internationally, but just at the moment we are awaiting the outcome of discussions taking place between the council and various parties to see if a quicker solution can be found."