The greatest credit goes to the workers at the plant - it is their skills, knowledge and commitment that has saved their jobs

David Miliband, South Shields MP

Receivers KPMG moved into the plant nearly three months ago when Viasystems announced it was to quit South Shields.

On the same day the company also closed down its site at Longbenton in North Tyneside site with the loss of 850 jobs.

The firm blamed a massive downturn in the electronics market for their decision to pull out, and the future of the South Shields employees remained uncertain until Wednesday.

The new company is making its employees 30% shareholders in the venture.

The deal will see new contracts coming into place for employees in which they have agreed to work 25% shorter hours and subsequent lower pay for the first few months.

The intricate buy-out plan is believed to involve a partnership of private and public sector financial backing.

Loyalty rewarded

Mr Brooks said: "This marks a change in the way this plant runs.

"This scheme will allow the employees' loyalty and commitment to be rewarded and everyone will benefit from our success.

"As an independent business in charge of our own destiny, we will be able to keep our workforce fully informed of the company's progress and performance."

The plant will offer leading-edge technology

Circatex will offer products for the data communications and telecoms industry, the automotive sector, IT and consumer markets and automated industries.

Dr John Bridge, Chair of Regional Development Agency, One NorthEast, said: "I am absolutely delighted by today's announcement.

"This really is a marvellous example of the North East's public and private sectors working together to pull off this fantastic achievement.

"The news that the South Tyneside plant has been saved is wonderful for the employees in the run up to Christmas.

"The return of production to the factory, albeit at a reduced capacity, will give an important boost to both the local and regional economy and provide vital work for the company's suppliers and their employees."

Europe's largest

David Miliband, MP for South Shields said: "The negotiations on the future of the plant have been tense, at times hair-raising.

"The greatest credit goes to the workers at the plant - it is their skills, knowledge and commitment that has saved their jobs." Circatex is operating from a site originally established by Plessey in the late 1970's.

Between 1986 and 1997 the site was developed by electronics firm ISL into Europe's largest printed-circuit-board manufacturer before it was sold to US-owned Viasystems.