BRITISH American Tobacco plans to close its dry ice expanded tobacco (DIET) plant in July.

The closure of the Peterlee plant, in County Durham, will result in the loss of 19 jobs, with a further seven posts going at BAT's Darlington operation, which supplies Peterlee with semi-processed tobacco leaf.

The Peterlee operation is a sister site of a larger plant in Northamptonshire, which employs 60 people and has three times the capacity of the County Durham operation.

The business faces the prospect of losing a quarter of its business when a major contract for a third party customer is completed in July.

Alan Coster, head of UK DIET, said: "We very much regret this situation. With no significant replacement orders on the horizon, we believe we can best meet demand going forward by consolidating productioin at Corby in Northmptonshire."

He added: "As part of our proposal, we hope redundancies can be mitigated by redeployment opportunities in Corby and by seeking other suitable opportunities elsewhere within BAT."

Meanwhile, a further 12 jobs could be lost in Darlington as the result of a departmental reorganisation.

Factory manager Desi Johnston said: "We will do everything we can to help employees affected by this announcement, but it is vital to our future that we are as cost-effective as possible."

UK DIET is part of BAT's UK and Ireland operations. It produces dry ice expanded tobacco for use in the production of lighter flavour variants of major brands for BAT and third party customers.

The Peterlee plant, formerly owned by Rothmans, has been in operation since 1981, becoming part of BAT with the merger of Rothmans in June 1999. BAT's operations include cigarette plants in Darlington, Southampton and Dundalk, in Eire.

They employ more than 1,800 people manufacturing brands which include Rothmans, Rothmans Royals, 555 Smooth and Dunhill.