THE future of a Blackburn factory is hanging in the balance after its parent company applied for insolvency protection.

Debt-ridden LG Philips Displays has already laid off 750 at plants in Europe which it said it can no longer support.

And while its factory, in Philips Road, Blackburn has been listed among those it still considers to be economically viable, its future is by no means assured.

Around 300 people are thought to be employed at the plant. In its heyday in the 1950s, when it was known as Mullards, it employed around 6,000 making parts for TVs and radios.

LG Philips Displays Holdings BV has applied to the Dutch courts for legal protection from creditors after admitting it has "unsustainable debt".

The company, a joint venture by Hong Kong-based LG Electronics and Philips, confirmed the Blackburn plant was economically viable'.

But a spokesman said it would need to seek the support of "a Dutch trustee and the supervisory judge" who would decide on legal protection to keep the factory going.

It has blamed its financial situation on an unprecedented decline' in the market for its cathode ray tubes, used in traditional TV sets as more and more people opt for flat screen TV sets.

In a statement, the company said: "LG Philips Displays has been in extensive discussions with the company's financiers and parent companies, Philips and LG Electronics, over the past several months to explore financial solutions to the market challenges, especially in Europe.

"However, these negotiations were ultimately unsuccessful.

"As a result of the insolvency filings, approximately 350 employees at the company's operations in Eindhoven, the Netherlands and 400 employees in Aachen, Germany are affected.

"The company's factories in the United Kingdom (Blackburn) and the Netherlands (Stadskanaal and Sittard, with support from some employees in Eindhoven) are economically viable and are expected to continue production, for which LG Philips Displays will seek support and approval of the Dutch trustee and supervisory judge.

"These operations represent more than 85per cent of LG.Philips Displays' production capacity employing approximately 15,000 people."

Unions are being kept informed of developments, the spokesman said.

This latest news comes three years after the company shed 150 of its 470 staff from the Blackburn plant.

And in 2003, a further 70 jobs were axed, but £1.5million was invested to improve technology.

Blackburn with Darwen Council leader Kate Hollern said the authority was monitoring developments.