Workers have been told that Northern Telecom will cut 530 jobs at Paignton, Devon and 50 at Maidenhead in Berkshire.

Nortel said the decision had been taken because growth in the market for telecoms equipment had not reached expectations.

The latest bad news comes amid a rash of job cuts, led last week by defence engineering group Vickers, which plans to axe 1,136 staff.

More than 4,500 jobs have gone in the industrial north east alone over the last two months.

3,500 jobs axed around world

Nortel plans to close its Proximity 1 Fixed Wireless Access operations at Paignton by next June.

The company said its opto-electronics business, which employs 1,400 workers in Paignton, was not affected by the announcement.

Elizabeth Rose, vice president of Nortel's Fixed Wireless Access said: "We regret the necessity of taking this action.

"Our employees have made a significant and valuable contribution to the development of Proximity 1, which Nortel believes has a viable commercial future."

Nortel, which employs 8,000 workers in the UK, said it hoped to redeploy some staff to other parts of its business.

The company said last week it was cutting its global workforce of 80,000 by 3,500 to focus on new growth markets for wireless products.