PLANS by steel giant Corus to cut nearly 4,000 jobs from its workforce -- including 28 in East Lancashire -- will cost it £40million over the next six months, the group revealed as it posted pre-tax losses of £165million.

The group, formed by the merger of British Steel and Dutch company Hoogovens last year, said the strength of the pound against the euro had caused continuing heavy losses in its carbon steel business.

The £165million pre-tax loss for the nine months to July 1 compares to a loss of £342million for the same period last time.

Operating losses for the period were £224million, before taking into account a £128million contribution from Hoogovens.

During the nine months Corus spent £44million on reorganising the workforce -- including its Blackburn distribution centre -- and said it would spend a further £40 million in the next six months.

Chairman Sir Brian Moffat said operational problems at its steelmaking operations continued to dog the company.

"The majority of these problems were resolved by the end of June but had an adverse impact on the operating result," he said.

The company will pay an interim dividend to shareholders of 1p.