HUNDREDS of steel jobs have been saved on Teesside following a dramatic turnaround by Corus.

Steel bosses have decided against awarding rail work to an outside contractor, following hard lobbying by unions.

A decision by Corus to keep the work in-house, underpinning 350 jobs, has been greeted with delight by trade unionists and politicians alike.

It was only 16 months ago that Corus announced the loss of 6,300 jobs, 1,100 of them to go on Teesside.

A Corus spokesman said: "For the past 18 months, Corus Construction and Industrial (CC&I) has worked closely with English Welsh and Scottish Railway (EWS) investigating the potential for the outsourcing of internal rail operations at the Teesside and Scunthorpe Sites.

"Throughout the period from early 2001, there has been strong lobbying and feedback by the trade unions and membership, and strong indications that there would be financial and operational benefits from retaining internal rail operations with our own workforce.

"The EWS proposal offers CC&I significant financial and other benefits in return for a long-term contract.

"However, despite these benefits, the business has decided that the priority is to focus all efforts on the current operational and financial challenges which face us.

"In that respect, the decision has been taken not to proceed with the EWS outsourcing proposal but to achieve internal benefits instead.''

Tony Poynter, spokesman for the steel unions, said: "Sense is being shown all round.

"There seems to be light at the end of the tunnel and it should all be boost for the workers' morale.''

Coun David Walsh, leader of Redcar and Cleveland Council said: "As a former steel worker I am particularly pleased to see these jobs are staying locally based.

"Distribution from the Teesside steel works has always been handled in-house and there is a good reason for that, in that it provides very good quality control.''

He added: "I am glad local people will still be working in this vital area.''