Eastleigh'S giant railway works is to be axed, throwing hundreds of people out of work.

Alstom announced today that it was closing its train renovation business by the end of 2005.

The firm said falling orders and over-capacity left it with no option but to shut the works.

The news, which sent workers home facing a miserable Christmas, was delivered today at a mass meeting at the giant Campbell Road depot.

In a massive economic blow to the town about 550 jobs - 450 staff and 100 contractors - are being axed. It will wipe out one of Eastleigh's biggest centres of employment.

Workers had been expecting the worse and the decision by Alstom - the debt-ridden engineering giant - means that the town's link with the railways, which goes back more than 100 years, will be severed.

Grim-faced employees leaving the plant this morning after their night shifts would not comment on the announcement.

Earlier today there was no sign that the death sentence was about to be passed on the Campbell Road works. Lights were blazing in the factory where workers had reported for work as normal - but through the window in what looked like the canteen area were a large number of cardboard boxes.

In a statement the company said today: "The decision to propose the closure was taken after the company had made a comprehensive review of its entire UK train renovation operation and the market it serves in terms of likely order levels for the next four or five years.

"The review focused largely on Alstom's renovation business at Glasgow, Wolverton and Eastleigh and concluded that there is significantly more capacity at the three sites than the market will support.

"Regrettably, therefore, Alstom has no other option than to close one of the three sites and con-

centrate activities at the other two."

Eastleigh is currently working on a number of train renovation contracts.

However, it is running at about 50 per cent capacity.

There are not enough new orders to sustain the business after the existing contracts are completed by the end of next year.

Alstom's operations director for UK train services Rhys Jarvis said: "We very much regret having to announce the proposal to close the Eastleigh business.

"We have undertaken a very comprehensive and rigorous examination of our entire UK

renovation operation together with an equally thorough review of the market available to us and the conclusion is clear.

"The market will not support the Eastleigh business in the future. There are just not enough orders out there locally to keep the factory working profitably."

Eastleigh Council leader Keith House said: "Eastleigh was built because of the railway industry. For the best part of 100 years the town owed its existence to the railway and this decision by Alstom will affect not only today's workers but many of our local community, with hundreds of families having worked or been involved with the industry.

"But we must understand the rail industry, along with the town's other heavy industries, has changed dramatically over the past ten to 20 years.

"To meet this change the borough council has developed a very strong record of working with employers, employment agencies and training partners to place people and to make sure their skills could be used elsewhere.

"Our policy has been to diversify the borough's employment base and we currently have a buoyant and prosperous economy. With our low unemployment figure we would expect to be able to help those who today find that they will be losing their jobs."

Eastleigh MP David Chidgey said: "It's a very sad day for Eastleigh, for all the workers at Alstom. The main priority now is to maximise the use of the site, which has the benefit of being near two motorways, rail transport and the airport, and to get the skilled workforce into other jobs."