MFI is set to shut 11 stores

The 533 jobs at MFI's Stockton plant are part of proposed cuts nationwide which could see 1,500 jobs being shed.

The firm confirmed it was closing 11 stores, cutting back on manufacturing and reducing its range to focus on fewer, more expensive products.

MFI said that its UK retail side had recorded an operating loss of �85.1m in 2005, against a loss of �31.3m in 2004.

'Bitter blow'

A factory in Scunthorpe is also closing, but manufacturing sites at Hull, Howden and Runcorn in Cheshire will remain.

Rob Fenwick, chief executive of supply at the company, said: "The proposed closures in Stockton and Scunthorpe are very difficult decisions to make, but necessary in order for our manufacturing business to remain sustainable going forward."

The Transport and General Workers Union said the move was a blow for workers.

Regional spokesman Ian Wood said: ""There's no doubt job losses on this scale are a bitter blow to the local communities.

"We'll be doing our best to mitigate these job losses in whatever way we can."