J L French is the town's major employer

Administrators BDO Stoy Hayward said J L French, in Presteigne, was in talks with a "prospective buyer" after going into administration in February.

They said the company was expected to complete the deal early in July.

Brecon and Radnorshire MP Roger Williams said staff loyalty had helped market the company successfully.

J L French went into administration after its US parent company announced restructuring plans.

In February, some people in Presteigne said they feared the area would become a "ghost town" if the jobs were locked.

Our fingers are crossed, but you can never be sure until the deal is signed and sealed Presteigne mayor Colin Kirkby

There has been a factory in Harper's Street, Presteigne - where J L French is based - for about 40 years.

Generations of families have worked at the plant making die-cast aluminium car components for the motor industry.

News the firm could survive has been welcomed.

Liberal Democrat MP Mr Williams said: "J L French in Presteigne has always been financially successful company so I'm pleased it is confident of finding a purchaser.

"The loyal workforce would have contributed to the successful marketing of the company."

Presteigne mayor Colin Kirkby said he hoped a deal would be struck soon.

"Obviously the town would be delighted if the jobs were saved," he said.

"Our fingers are crossed, but you can never be sure until the deal is signed and sealed."

A spokeswoman for administrators BDO Stoy Hayward said on Friday: "J L French is in negotiations with a prospective buyer. It is hoping to complete by early or mid-July."