A bakery is set to rise from the ashes of a major unsolved fire which gutted its production base.

Peters Cathedral Bakers was forced to transfer production to a disused food factory in Peterlee, east Durham, following the blaze which destroyed its long-standing bakery and head office building, on Durham's Dragonville Industrial Estate, in April last year.

Production was lost for 31 days, but after hastily equipping the temporary base and bussing staff from Durham, the company's 71 shops reopened, stocked with Peters popular range of bread, savouries and cakes.

The Dragonville bakery has been rapidly re-built and re-equipped at a cost of around £9m.

Staff have been at the 6,000-sq ft state-of-the-art premises, testing the new equipment over the last week, prior to the official re-opening, next Tuesday.

Retail sales and business development manager Alan Dixon said the aim was always to return to the company's traditional home, in Durham.

"We have done it in only around 17 months and we're now just about fully up and running.

"There's just a bit of fine tuning the plant and machinery, but we're already producing some lines here.

"We moved back, lock, stock and barrel. Just about everything is new and it's just a case of getting things like oven temperatures right.

"We've retained all 575 staff. None lost their jobs and we've tried to keep disruption to a minimum.

"We're delighted to be back to our spiritual home," added Mr Dixon.

The company hopes there will be cause for double celebration later in the month, as founder, and chairman, Peter Knowles is one of three short-listed finalists in the British Bakery of the Year awards, at London's Grosvenor House Hotel, on September 19.

Mr Knowles began the business in a single bakery unit in Belmont, Durham, in 1966.

He soon switched to Dragonville, where the company expanded and continued to increase its number of shop outlets, with annual turnover topping £13m by 2002/3.

Mr Knowles is still involved in the business, with sons Richard, the managing director, and Chris, the financial director.