IN all probability, Redcar would still be a quaint North-East fishing village if it hadn't been for the arrival of the steel industry at the beginning of the last century.

The landscape was changed forever when the huge blast furnaces and massive mills moved in more than 100 years ago. The huge industry soon came to dominate the seaside town.

But when the steel industry started to decline following nationalisation in 1968, Redcar slowly started to go downhill as well.

Many people in the town believe last week's announcement could well be the final nail in the coffin for the once- thriving town.

Traders and shopkeepers are fearful of a drastic loss of trade and estate agents believe there will be a slump in the demand for housing - despite the arrival of new estates springing up on the outskirts of town.

Councillor David Walsh, leader of Redcar and Cleveland Borough Council, said the main problem affecting the town would be the loss of purchasing power to the town and a lack of self worth to employees.

"Every redundancy has an impact on the family and extended family - and that extends into the wider community," he said

Coun Walsh said the area was on the way back up, but the latest setback could have a dire effect.

"We been picking up new jobs and there was a general feeling of confidence and that makes it much more difficult."

One coil plate mill worker, who asked not to be named, said he and his family were already living on a day-to-day basis as they tried to come to terms with their bleak future.

"We are just preparing for when I get finished," he said. "We have stopped going shopping to the supermarket and just get what we need each day."

The effects of mass redundancies are also hitting the next generation.

Ann John, chairman of the management committee at the OK4 Young People centre in the town said the youngsters are worried.

"They are worried about their fathers, stepfathers and older brothers and it is making life at home very difficult. It is causing anxiety and they have no way of stopping it. But it will be a few weeks before we start seeing absolute concrete evidence."

Many young people are panicking and believe their only option is to go to college, but they are worried that they will be an added financial burden to already stretched parents.

"This is an area of long term unemployment - it is not an optimistic area," said Ms John.

Youngsters are becoming increasingly depressed and worried about their own futures and many are turning their backs on their home town in a desperate search to find work elsewhere.

More than a century after it arrived, the steel industry could soon be a thing of the past in Redcar. The town looks to the future with trepidation.