Defence giant BAE Systems is planning to axe more than 600 jobs and close a historic factory which made tanks during the First World War.

The firm said 330 jobs will be lost through the closure of the site at Newcastle-upon-Tyne, which is currently making Terrier vehicles for the Army.

The factory has been a defence manufacturing site since 1847, building a number of ships and employing tens of thousands of workers in its heyday.

Up to 280 jobs will also be lost at three BAE sites in Radway Green, near Crewe, Washington in the North East and Glascoed in South Wales under the proposals, as well as the prospect of 10 job cuts at the firm's head office in Farnborough, Hampshire.

BAE said the proposal to close the Newcastle site at the end of 2013 followed a business review which concluded that there was no prospect of new UK armoured vehicle manufacturing work once production of the Terrier ends next year.

The firm said the proposals now under consultation followed major efficiency improvements and reductions in the amount of ammunitions required by the Ministry of Defence.

Managing director Charlie Blakemore said: "We need to adapt to very challenging market conditions and further reduce our overheads to drive better value for our customers and increase our competitiveness in the export market.

"I know that this is difficult news for employees and we will do all we can to help them through this difficult period and mitigate the proposed job losses wherever possible."

BAE have previously been accused of "bailing out" on employees at another of its plants in Yorkshire, where up to 900 jobs will be cut.

Defence Secretary Philip Hammond said: "The MoD now has a fully funded equipment programme that will see the UK award industry £160bn worth of contracts over the next ten years, including £5.5bn on new and upgraded armoured vehicles.

"We have set out the steps we are taking to support industry, and are promoting exports, increasing opportunities for smaller firms and investing in new technology."

However, Labour shadow defence secretary Jim Murphy criticised the closure, saying that: "The country is seeing defence industrial decline on this Government's watch.

"Historic sites are closing, jobs are under threat and the defence industry is lacking support.

"Ministers must do more to demonstrate they have a long-term plan to stimulate and support the UK-based defence industry.

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