The company came to Teesside in 1994

The South Korean company told its workforce the news on Thursday morning after growing speculation it was to close.

Samsung said production of microwaves and computer monitors at the plant, in Wynyard, near Billingham, will end in April with the loss of all jobs.

The company blamed low worldwide prices for making it "impossible" for the plant to compete with the cost of equivalent products manufactured in Eastern Europe and the Far East.

The Prime Minister Tony Blair expressed his sympathy for the workers when the subject was raised during his monthly news conference at Downing Street.

He said, as there had when other major employees cut jobs in the region, there would be support for workers to help them find other job opportunities.

Hartlepool MP Peter Mandelson said it was a bitter blow for the area.

We have considered a number of alternative options, but unfortunately this is the only practical way forward. John Slider, Samsung

He said: "We have got to make sure that we work very hard with the regional development agency, One NorthEast, and the local authorities to put together a project team to try and do whatever we can to turn this around.

"Let's suffer the blow but certainly not give up hope."

In a statement John Slider, deputy managing director of Samsung UK, said: "It is with great regret that we have to announce the closure of the Wynyard Park site.

"In the immediate future, our Wynyard employees are our major priority.

"We will be offering a full package of compensation that will include redundancy payments well above the statutory minimum.

"We will also be making every effort to help our employees find new jobs by providing outplacement counselling services to prepare our staff for job-seeking."

Career opportunities

Public sector agencies responded to the news by establishing the Samsung Project Group to offer immediate assistance to staff.

The group is led by Stockton Borough Council with assistance from One NorthEast, Job Centre Plus, the Learning and Skills Council, Government Office for the North East, Tees Valley Regeneration, Tees Valley Partnership and English Partnerships.

Union leaders said the company should pay back money it had received in government grants when it first came to Teesside.

Amicus regional officer Davey Hall said: "We should de-invest in them. This announcement highlights the crisis in manufacturing.

"The government should now take urgent action to stop the haemorrhaging of jobs.

"It also shows how inward investment in Britain is not promoted by a flexible labour market because as soon as the grant money runs out, companies like Samsung are on the run."