STEEL giant Tata is to axe 1,500 jobs from three of its UK factories, delivering a huge blow to the industry and the country's economic recovery, it was announced today.

The Indian firm said it was proposing to close or mothball part of its Scunthorpe plant, putting at risk 1,200 jobs, as well as cutting 300 jobs at Lackenby Beam Mill on Teesside.

Ninety jobs are to go at Tata's Hartlepool site.

The company also announced that it will invest £400m in its Long Products business over the next five years.

Unions said the cuts amounted to eight per cent of Tata's UK workforce and were a devastating blow to the regions affected.

Jon Bolton, director of Tata Steel Long Products, said: "As difficult as they are, these steps will help us to shape this business for the future. Over the longer term we will be able to re-invest in our people, our customers, our equipment and the local communities in which we operate.

"Some of our key markets are not forecast to fully recover from the global economic downturn for a number of years. Other market sectors have changed and our customers are demanding new and different products from us, as well as improved levels of service."

George Dunning, the Leader of Redcar and Cleveland Borough Council, a former steelworker of 30 years, said the reported development would represent a "bitter blow" for the local economy, coming just three months after the historic deal which saw Thai firm SSI secure the Teesside Cast Products plant was struck.

"This is a devastating blow for the area, particularly as we have been looking forward to new job opportunities being created in the wake of the SSI deal being announced," he said.

Business Secretary Vince Cable said: ‘‘I am very disappointed at this news. This will be a worrying time for workers at Scunthorpe in particular, and also in Teesside.

‘‘I have asked our local team to establish a task force to work closely with Tata so everything is done to mitigate the impact on jobs and on the local communities in Scunthorpe and Teesside.

‘‘In addition, the JobCentre Plus Rapid Response Service will be on hand to provide a range of support measures.

‘‘Tata Steel has a strong presence in the UK. I welcome its announcement that it’s investing £400 million over the next five years to improve the reliability, productivity, and environmental performance of its manufacturing operations.

‘‘In Redcar, there is also the offsetting good news of the reopening of the blast furnace later this year following the sale of the plant to the Thai steel firm SSI.’’ Keith Hazlewood, national officer of the GMB, said: ‘‘The announcement demonstrates what a roller coaster industry the steel industry is. The recent announcement that steel making is to start again on Teesside is directly followed by these 1,500 job losses across Tata’s long products division.

‘‘The job losses will impact at Scunthorpe, Teesside and Hartlepool and in the steel mill sites making steel joists used mainly in construction.

‘‘These job losses amount to approximately 8% of the Tata UK workforce. This is a devastating blow to UK steel making, to the local communities and to the UK economy.

‘‘GMB and the other steel unions will work with Tata to mitigate as many job losses as possible, and will oppose any compulsory job losses. GMB will fight job losses in steel industry.’’ Michael Leahy, general secretary of Community, said: ‘‘We are, of course, extremely disappointed at the prospect of further job losses, coming as they do on the back of earlier cutbacks. However, difficult though the current position is for all concerned, we recognise that this is part of a wider strategic review of the business aimed at securing its long-term viability and access to new markets. To that end, we welcome the commitment to invest £400m over the next five years.

‘‘The key now is for the company to engage the local trade unions in consultation on the way forward. We will be seeking an early meeting to explore all possible means of avoiding any compulsory redundancies.’’ Unite’s national officer, Paul Reuter, said: ‘‘This is a real blow for the region. Today’s announcement highlights just how fragile our economy is and the coalition Government should not be so quick to start talking about growth and recovery.

‘‘Union representatives are currently working with Tata to mitigate the impact of the cuts. Unite has already demanded that there should be no compulsory redundancies and we believe that this should be possible to achieve.

‘‘While the job cuts are very disappointing the investment is to be welcomed and Unite will be working to ensure the money benefits the workers.’’ Ian Lucas, Labour’s shadow industry minister, said: ‘‘Today’s announcement is a hugely worrying sign for industry in the UK, and a blow to the people of Scunthorpe and Teesside. This seriously calls into question how the Tory-led Government is facing up to the challenges facing the economy, which has flatlined in the last six months instead of moving towards significant growth.

‘‘The public needs to know what measures were taken by Vince Cable to prevent these job losses and to work with the steel industry to plan for the future.’’

Full story and reaction in tomorrow's Northern Echo