LONDON (AP) -- One of Britain's biggest steel plants is suspending production, threatening up to 2,000 jobs, after a crucial contract was canceled.
Workers at the Teesside Cast Products plant in the northeast of England town of Redcar were told the grim news earlier ahead of a 90-day consultation on the future of the plant.
Union leaders expressed "outrage" at the news and said the livelihoods of thousands of workers were now in jeopardy.
Owner Corus said the development had become "unavoidable" because of the termination of a ten-year contract by four international steel slab buyers.
"The company has begun discussions with employees and their representatives about what can be done to mitigate the impact of mothballing the plant on the 1,920 employees and what future action may be needed," said Corus, which has been owned by Indian steel company Tata Steel since 2007.
Any decision to mothball is likely to lead to a very significant number of layoffs, Corus added.
Corus had agreed to sell a majority stake in the plant to a consortium led by Italian firm Marcegaglia, but Corus said the consortium had "unilaterally and unreasonably" initiated moves to terminate the contract, making Redcar "unviable."
It said it was using all legal means to ensure the terms of the 10-year contract were enforced and that the four members of the consortium lived up to their contractual obligations.
Business Secretary Peter Mandelson said he has spoken to Corus and expressed his concern that the unilateral termination of the contract, known as the Offtake Framework Agreement, should threaten closure of the entire plant.
"It is essential that Corus does everything it can legally, and with the government's assistance, to reinstate the agreement," Mandelson said.
"It is unacceptable that such a development should threaten jobs on such a scale, with such a potentially devastating impact on the area," he added.
And Prime Minister Gordon Brown said he hoped the jobs could be saved.
"We are doing everything in our power to ensure that the contract is upheld," said Brown.