The electronics company Hyundai has confirmed that the economic crisis in Korea has meant it delaying for a year plans to build a multi-million pound semi-conductor factory in Scotland.

The company said it was still committed to the project but it would not proceed with equipping the plant at Dunfermline, Fife, until the Korean economy improves.

In a statement Hyundai said: "Investment in manufacturing equipment and tooling may be delayed for a period of up to 12 months, pending recovery in the financial markets in Korea."

The plant, which is expected to employ up to 2,000 people in an area of Scotland hard hit by the demise of the coal industry, was due to open at the end of next year.

Construction will continue as planned but the project will be temporarily halted when building works are completed in the spring.

The decision was reached at crisis talks last Friday between senior company executives at Hyundai's head office in Seoul.

Hyundai's decision was greeted with a mixture of relief and disappointment by the Scottish Secretary Donald Dewar.

He said: "I very much welcome Hyundai Electronics' commitment to full implementation of phase one of the Dunfermline project, albeit on an extended timescale.

"Any delay in equipping and commissioning the new plant is a disappointment but we recognise the scale of the difficulties currently facing Hyundai."

Hyundai laid the blame for the delay in the Dunfermline project on South Korea's financial crisis and the constraints imposed by the International Monetary Fund, which is helping to prop up the ailing economy.

There were fears the company would be forced to scrap the project, which is being partially funded with British government aid.

But Hyundai said: "The company's fundamental strategic need for semi-conductor capacity in Europe remains unchanged, as do its reasons for choosing Scotland.

"When construction of the facility has been completed we will have invested in the order of �250 million in Scotland."

It also made several undertakings including an agreement to retain all of its 80 existing employees and honour the formal job contracts offered to another 12.

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