Workers at a threatened electronics factory on Tyneside have voted by four-to-one in favour of a pay cut and up to 100 job losses.

More than 650 workers at the Circatex plant in South Shields have been told the company has to shave 15% off its budget, because of cheap foreign imports of printed circuit boards.

The company, which is already facing a legal challenge over millions of pounds given to it in state grants, has large debts following a management buyout two years ago.

The Amicus union has described the situation as "devastating".

On Friday morning it was announced that shopfloor workers and staff had voted by 444 in favour, and 102 against, in favour of the drastic move, with a few non-voters.

Grant aid

The result of the ballot about members of management and supervisory staff has not yet been revealed.

The company was given a �3.75m grant to aid a management buy-out when previous owners Viasystems decided to close the plant and a sister factory in North Tyneside.

Rival UK firms claim the December 2001 grant breeched European Union competition rules.

If Circatex is forced to pay back the cash, the future of some or all of the South Shields jobs would be in doubt.

Six companies are preparing an official complaint to the European Commission because they say the Department of Trade and Industry (DTI) grant gave Circatex an unfair advantage.