WORKERS were left reeling today when it was announced 40 jobs were to be axed at one of East Lancashire's largest employers.

Textile firm The Hilden Group, which employs more than 550 workers in Blackburn, Oswaldtwistle and Accrington, announced it was to close the preparation and yarn dyeing operation at its JB Smiths Ltd company, based at Three Brooks Mill, Roe Greave Road, Oswaldtwistle, at the end of March. All 40 staff will go.

Bosses have pledged to relocate some employees at other mills within the company although non-executive chairman Peter Hargreaves today revealed only 10 alternative positions had so far been found.

Mr Hargreaves, who said the company regretted the decision, added: "Our priority at the moment is to find alternative jobs. We are hoping to find at least 10 which, sadly, would leave 30 unemployed."

Mr Hargreaves blamed the decision on an "ever-increasing competitive market", adding: "It is necessary to reduce costs, eliminate loss-making activities and protect the mainstream business and other jobs in the group."

He said the Hilden Group had suffered badly during the last 12 months and pointed at the foot and mouth crisis and the American terrorist attacks on September 11.

Stephen Walsh, secretary of the Lancashire Textile Manufacturing Association, of which the Hilden Group is a member, said: "It is a tragic sign of contraction within the industry but at the end of the day it is a problem across the manufacturing industry as a whole.

"Foot and mouth and September 11 has affected all businesses, not just manufacturing, but commerce as a whole."

Nobody from the GMB union or the Amicus union, formerly the AEEU, was available for comment.

The news came just weeks after it was announced that more than 50 new jobs could be created at the Hilden Group's Oswaldtwistle Mills, which it hoped to develop as a leading regional retail and leisure complex.

And in December weaving operations at Moscow Mill in Oswaldtwistle were merged with more modern facilities at Britannia Mill in Blackburn.

The last Jacquard loom closed down in December at Oswaldtwistle, bringing the end of an era to textile manufacturing in the town.

Employees were transferred from Oswaldtwistle to Blackburn over the past 12 months where a multi-million-pound investment programme has expanded capacity to house the Moscow Mill looms. More than 200 tonnes of plant and machinery had to be moved.