NESTLE Rowntree today reassured shocked York workers that their factory was NOT under any threat of closure because of the strong pound.

But it warned that some jobs COULD be lost if sterling keeps its strength and exports continue to suffer as a result.

The company issued a statement following national media reports that the York factory was in danger of shutting down in the wake of falling exports of Kit Kats.

Workers arriving today at the factory were shocked and distressed by the reports.

One worker from the export department said she was aware of a problem on the strength of the pound. "But this is still shocking news, I just couldn't believe it," she said.

"I've worked here more than a year and I will be very sad if anything happens to this factory and all these jobs."

Eric Harris, a casual factory worker who has been working at Nestl for four years, said he was very upset. "This is a huge blow. This is my livelihood. I had no idea there was a problem and if I was to lose my job it will be very difficult to find another one."

But the company said: "Reports of widescale job losses at York or threats to the factory are completely untrue.

"There has been a transfer of some Kit Kat production from York to Hamburg in recent months.

However, the success of Kit Kat Chunky, which has brought substantial additional production to the York factory, has offset any lost export volumes and there have been no job losses as a result."

It said that the company had expressed concern about the strength of the pound against the euro, and the effect of this on its export business. "These media

reports are based on exaggerated accounts of these concerns.

"It would be wrong to speculate about any future impact on jobs, and the company would in any case consult first with trades union representatives and employees on any matter affecting employment.

"However, if the strength of the pound is maintained then there is a risk that our export business would suffer further and that this would lead to job losses."

The closure scare blew up after Harry Donaldson, national officer of the GMB general union, was quoted as saying: "Nestl have told us quite openly that unless something is done to address the level of the pound, they will have no option but to review the status of their UK operation.

"Productivity is running at record levels but there is simply no way they can cope with the uncompetitive exchange rate.

"The Government must give our members and the rest of manufacturing industry a break by making it clear that the current level of the pound is unsustainable."

But Mr Donaldson said today his comments had been taken out of context.

John Kirk, GMB spokesman for the York factory, said: "This story has caused the workforce in York total distress. People believe that their jobs are under threat.

"At no time have GMB and Nestl discussed job reductions."

Yorkshire and Euro MP David Bowe said this afternoon he planned to raise the threat to Nestl jobs posed by the pound when he meets Trade and Industry Secretary Stephen Byers in Brussels tomorrow.

PICTURE: WALK ON BY: A Nestl Rowntree worker arrives at the Wigginton Road entrance to the York factory today Picture: Mike Tipping