UNIONS last night described furniture group MFI's decision to close its North-East factory with the loss of more than 500 jobs as a "dark day" for UK manufacturing.

In an announcement to the City yesterday, the group revealed plans to cut almost 1,500 jobs across the UK as part of a restructuring drive aimed at reviving its flagging fortunes - which yesterday saw it plunging £600,000 into the red.

And the company said the axe would fall at its Stockton plant, on the Preston Farm Industrial Estate, near Eaglescliffe, with the loss of 533 jobs.

Workers were given the news yesterday morning when they started the early shift.

Last night, Allan Gray, regional organiser for the Transport and General Workers' Union, said: "To be honest, the company have not been in touch with me yet.

"I am scheduled to have a meeting with them on Thursday, but that has been arranged for two weeks.

"This is absolutely devastating for Stockton and the surrounding area, and it is a dark day for manufacturing in Britain."

He said there had been rumours that MFI would be manufacturing its kitchen and bathroom furniture in Italy and Turkey instead of the UK.

MFI said yesterday it would cut UK manufacturing by 40 per cent and close at least 11 stores, as well as shut three home-delivery centres and its sofa workshop business.

The move follows new MFI chief executive Matthew Ingle's long-awaited review of the firm as he tries to haul the furniture retailer out of the red.

MFI also said it made underlying losses of £600,000 last year, against £54.5m profits the year before.

About 1,100 jobs - nine per cent of the company's workforce - could go from its manufacturing sites as it sources more products from elsewhere.