We could see half a million jobs lost in manufacturing and the service sector over the next 12 months

Roger Lyons, MSF

Earlier in the year, the Canadian-based giant said it planned to reduce its global workforce by 30,000.

The company employs more than 8,000 people in the UK and Eire, at laboratories in Paignton, Harlow, Monkstown, Galway and Shannon.

Nortel is a major supplier to telecommunications operators such as BT.

The Manufacturing, Science and Finance Union (MSF), which represents some Nortel staff, has renewed its demand for a cut in interest rates.

US economy

The Bank of England's Monetary Police Committee (MPC) met on Tuesday. The outcome of its talks will be announced on Wednesday.

The union spoke out after thousands of job losses at many leading hi-tech companies over the past several months.

The MSF said it had been warning the MPC for months that "decisive action" was needed to shield British exporters from the downturn in the American economy and the strength of the pound.

Roger Lyons, MSF general secretary, said: "The MPC have been too cautious in setting the interest rate over the past six months.

"They have turned the screw on our export industries, we need decisive action from the MPC or we could see half a million jobs lost in manufacturing and the service sector over the next 12 months."