THE outdoor products division of Electrolux, which makes the Flymo lawnmower range, is to operate as a separate business.

The Flymo factory, in Newton Aycliffe, County Durham, will become the UK headquarters of the new business, called Husqvarna.

Husqvarna will be floated on the Swedish stock market, with Electrolux shareholders being offered matching shares in the new company.

Clive Middlebrook, UK regional manager at Newton Aycliffe, said: "We are confident that this change of entity will enable us to focus our efforts on our strong, market-leading brands."

One analyst said that as the parts of the business were so different, it made sense to divide them and bring in specialised management for each.

The Newton Aycliffe factory employs 200 full-time staff and hundreds more seasonal workers. Half of the lawnmowers sold in the UK are produced by Flymo.

Last year, it produced more than one million lawnmowers.

Earlier this year, Electrolux announced plans to move operations to countries where labour costs are lower.

Yesterday's announcement secures the future of the Newton Aycliffe site.

The company reassured union officials earlier this year that the company's sites would be reviewed on an individual basis, and that both North-East sites were in a strong position.

And it cemented its pledge by investing £7m in its Spennymoor plant so it could produce the company's new flagship range of cookers.