ONE of the North-East's biggest defence plants could close with the loss of 300 jobs.

The future of the Royal Ordnance (RO) Factory, at Birtley, near Gateshead, is under review by its owner, BAe.

The company is examining the viability of all its munitions plants and will make its findings known in February.

The Birtley site, which makes shell casings for the Army, has seen orders dwindle after the end of the Cold War. A Ministry of Defence policy to go out to competitive tender for munitions supplies has also had an impact on the business.

It employed 1,000 people when it was privatised and sold to BAe in 1987.

BAe said yesterday it had entered a period of consultation with unions represented at the site, including the GMB, AEEU, and the Institution of Professionals, Managers and Specialists.

A spokeswoman for the RO division of BAe said: "We are undergoing a review of all our operations in a bid to make better use of our manufacturing capacity, in a bid to become more cost effective.

"We are currently engaged in dialogue with the trade unions, and have already implemented joint union and management working groups to look at the problems we face.

"The implications the review will have on all our sites, including the shell casings plant in Birtley, will be announced after the consultation process, due to end in February."

*Meanwhile, managers who have been trying to rescue the Viasystems business, on South Tyneside, from receivership will today make an announcement on the future of the plant.

More than 1,500 people have been put out of work by the closure of Viasystems operations, in Longbenton, North Tyneside, and South Shields.

The Longbenton plant has already been mothballed, but there is still some hope for the South Shields factory.

The company went into receivership in September and unions and management have been battling ever since to save some of the jobs.

Managers were due to meet outside the company's plant in Eldon Street, South Shields, at 10.30am.