FAMILIES in a job-starved North-East dale were last night trying to come to terms with the latest blow to hit their fragile economy - the loss of more than 50 jobs at a 133-year-old steel works.

At the same time, politicians and job agency chiefs were trying to discover more about the Midlands engineering company which took over Weardale Steel, at Wolsingham, in County Durham, just over a month ago.

After Eastwood Engineering had initially announced it was going to develop new markets, in a shock move on Thursday management told employees that the company had gone into administration.

Workers, who say they have not received any wages for two weeks, said they felt betrayed and were devastated by the redundancies.

The company's managing director at Wolsingham, Tony Coade, said the firm was based in Birmingham. But at Companies House, its address is given as a private house in Huddersfield.

Government Chief Whip and local MP Hilary Armstrong said: "Along with the local council and job agencies, I am far from satisfied at how this affair has been handled.

"Despite repeated attempts, we have been unable to talk to Eastwood Engeering and discuss any plans they may have for steel-making. This will be high on the agenda of talks I am having next week to try to secure a future for Weardale Steel."

Eastwood management refused to speak to The Northern Echo yesterday.

The Wolsingham company, which first started manufacturing steel under the pioneering Charles Attwood in 1869, is now in the hands of Sheffield administrators Poppleton, Appleby.

Its managing partner, Jeremy Priestley, said: "Two of our partners are now running the company. We have advertised Weardale Steel as a going concern and we are hoping to find a buyer.

"There has been some support from existing customers, which is enabling us to carry on trading at a reduced level."

Mr Priestley said the workforce had been cut from 83 to 29 employees.

The company's cash-flow problems are being blamed on delays in payments from some of its overseas customers.

Durham county councillor John Shuttleworth, who represents Weardale, said: "In a dale context, following on from the Blue Circle closure, the steel works job losses represent a bigger blow than Black & Decker does to the whole of the county."

Kenny Lally, shop steward for Amicus, which represents the workforce, said: "We feel we have been totally betrayed. This new company raised false hopes."

Mr Lally, whose grandfather, father, five brothers and his son have all worked at Weardale Steel, said that not only had the workforce not been paid for two weeks, there would also be no holiday or redundancy payments.

"I came here 29 years ago empty-handed, and I am leaving empty-handed," he said.

Mr Lally said there was still £5m worth of casting in the steelworks. The 29 key workers being kept on are completing contracts for Germany and Holland.