A Stokesley firm laid off 140 highly-skilled engineers and designers this week.

Managers at Nepco Europe announced the lay-offs on Wednesday before holding talks about the future of the firm, which designs and builds power stations from its base on Stokesley industrial estate.

Options may include a rescue package funded by banks or for the company to be sold to a third party as a going concern.

Nepco could also follow its parent company, Enron Europe, into administration, which would mean it could continue trading.

The firm's difficulties relate to the collapse of Enron Europe, which went into administration last week.

Ironically, the Stokesley firm was expanding to cope with a lucrative new contract to design a power station on the Isle of Man.

A year ago, it employed just 30 people but that number had grown and it expected to employ 200 by next year.

As Nepco employees and freelance workers faced uncertainty, managers hoped a rescue package could be set up. They held talks with their banks and accountants from PricewaterhouseCoopers through the week.

A Nepco spokesman could not speculate on whether staff would be given their jobs back. "Management are working hard on this and have had to lay people off while they try to secure their future," she said.

The gloom is in stark contrast to Nepco's optimism earlier this year.

It was awarded a huge contract in July to design and oversee the construction of a glass-clad power station on the Isle of Man, and in September, manager Mr George Sayers announced a fresh recruitment drive for work expected to last 18 months.

Huge turbines would be manufactured - possibly by other Cleveland engineering firms - and shipped to the island. No decision had been taken at that time.

Nepco has been proud to employ skilled people from North Yorkshire and Teesside. Many had long professional connections with the British and European power and engineering industries.

In addition to draughtsmen and engineers, it used the services of computer-aided designers, and translators specialising in European languages and technical processes.

Elsewhere, 100 Enron staff at Wilton heard their jobs were safe after Centrica took over the firm's customer service business.

Enron's gas processing plant at Seal Sands and industrial sites at Wilton International, North Tees and Billingham are not affected, nor Teesside power station at Grangetown, run by Enron but owned by Teesside Power.