PRIME Minister Tony Blair last night signalled an aid package for Teesside if Corus goes ahead with massive job cuts.

But Downing Street and Labour MPs are now hoping that the steel unions can persuade the company to step back from axing more than 1,000 jobs on Teesside and more than 6,000 across England and Wales overall.

And in key talks today, unions and council leaders on Teesside are expected to discuss the future of the industry in the area, including a possible bid to take over the threatened coil plate mill at Lackenby if Corus insists on closing it.

The Anglo-Dutch company last week unveiled plans for a huge programme of redundancies, blaming falling demand in the UK for steel and the pound/euro exchange for making British-produced steel too expensive on the Continent.

The redundancy proposals are out to consultation, but Downing Street last night gave a clear signal that the Prime Minister, MP for Sedgefield, would not walk away if the jobs axe fell on Teesside.

Mr Blair yesterday met two North-East Labour MPs - Middlesbrough's Stuart Bell and Dari Taylor, of Stockton South - along with other MPs representing "steel constituencies" around the country.

A Number 10 spokesman said that "the Government has no intention of turning its back on those affected.

"We are working up within government an urgent package looking to offer help and support to the individuals affected."

The aid package would consider "how we can back regeneration schemes in the areas affected".

Employment schemes and re-training programmes were some of the potential aid initiatives to be considered.

Number 10 stressed that "dialogue is still going on with the company" which was talking to the unions.

And the Downing Street spokesman pointed out that Mr Blair had already asked Corus to think again.

Dr Ashok Kumar, Labour MP for Middlesbrough South and East Cleveland, urged Corus to let someone else run the coil plate mill at Lackenby if the company insisted on pulling out.

Dr Kumar said the steel unions locally, and Dave Walsh, leader of Redcar and Cleveland council, would today discuss the possibility of a bid to mothball or even possibly take over the plant.

The delegation, which will also include Colin Moore, the council's chief executive, will meet officials from Corus on Teesside.

Tony Poynter, chairman of the multi-union steel committee at Teesside, said the unions were glad of any help in the fight for the jobs.

However, Corus has already rejected a plan by unions to take over the giant Llanwern plant in South Wales.

On Thursday, national steel union leaders will unveil details of their rescue package in an attempt to avert some of the job losses.

Yesterday, North-East newspapers The Northern Echo, The Evening Gazette, The Journal and The Hartlepool Mail announced that they would be working together to put pressure on Corus to think again.

Meanwhile, Chancellor Gordon Brown was yesterday urged to spend £3bn in his Budget to help struggling manufacturing firms as well as boosting public services and pensions.

The TUC said it had "real concerns" about the state of manufacturing industry.

General secretary John Monks said: "The recent heavy job losses in the steel and car industries show that manufacturing needs more than a helping hand if it is to turn the corner."

Manufacturers and home owners are set for a boost with the Bank of England expected to cut interest rates for the first time in a year on Thursday