A NORTH-East family business has headed-off the threat of closure and come up with a rescue package to secure most of the firm's jobs.

Geoff Moore, who runs ladies clothing business Loudella with his wife Pamela and son David, said he was exhausted, but relieved, after working round the clock for the past week to come up with a survival plan for the next year.

The firm, in Bishop Auckland, County Durham, had ceased trading and notice had been given to its 40 workers.

But the notices were rescinded yesterday and Mr Moore, 57, said he was optimistic that the firm would be open for business as usual by August 7.

"The majority of the workforce are over the moon," he told The Northern Echo.

"I can't guarantee to retain everybody's jobs, but I'm optimistic it will continue, and it gives me time to explore other avenues."

The rescue package came about after lengthy meetings with one of Loudella's main customers - a major clothing manufacturer.

They devised a 12-month programme of work for Bishop Auckland, and pulled back some work which was heading for offshore production.

Cheaper production costs in places such as Hong Kong have been cited as one of the main reasons why the North-East's clothing industry is in crisis.

Mr Moore said it would have been devastating if the factory had closed and he and his workforce would have faced the dole.

Loudella expanded last May when it moved to bigger premises in Caroline Street and took on another 12 workers. But it ran into difficulties when work began to dry up.

Carole Laverick, economic development officer with Wear Valley District Council, said: "We're delighted Loudella will be able to carry on and we'll help in any way we can."