A £20m spending plan has given the beleagured steel industry on Teesside a much-needed boost.

The announcement yesterday by Corus, formerly British Steel, came just a day after the company announced losses of £113m over the past six months.

Chairman Sir Brian Moffatt had warned that more job losses could be on the way in a bid to improve efficiency, but Corus followed the announcement by releasing details of the £20m cash injection.

The funds will be spent on modernisation at its Redcar blast furnace, and union bosses welcomed the news as a "commitment to Teesside".

Mick Adams, divisional officer for the Iron and Steel Trades Confederation (ISTC), said: "The Corus results were disappointing but not wholly unexpected.

"However, the Teesside plants are very efficient and very strong. They could have left the blast furnace to fall to pieces but this demonstrates a commitment to Teesside."

Corus announced 1,430 job losses earlier this month, including many at the British Steel Research Centre in Grangetown, Middlesbrough.

The company, formed by the merger of British Steel and Dutch company Hoogovens last year, employs between 5,000 and 6,000 people on Teesside.

Bosses at the group say it is being crippled by the strength of the pound, which is reducing the competitiveness of UK manufactured products abroad.

ISTC general secretary Michael Leahy met the Secretary of State for Trade and Industry, Stephen Byers, recently to express the union's concern at the job losses.

Mr Leahy said: "I would urge Corus to think of the industry in the long-term, and rather than reacting to short-term problems."

Mr Byers told Mr Leahy that he expected to meet Corus management within the next week to hear what its plans were for the future of Britain's steel industry.

Since 1996, the average price for each tonne of steel exported from the UK has fallen from £410 to about £300.

The blast furnace at Redcar will be shut down next month for a 70-day refurbishment, which will make it one of the group's most modern and technically-advanced iron-making sites