FRENCH heavy engineering group Alstom, which employs hundreds of people at its train care depot in Eastleigh and is involved in the building of Southampton's Queen Mary 2, is back in the news again with debts of £3.4 billion.

EU officials are set to launch a formal investigation into France's rescue package. Employees in Hampshire will be watching developments closely.

Mario Monti, Europe's competition commissioner, claims government aid like that distorts and holds back the EU economy.

In effect, Alstom is being subsidised to the detriment of other companies that don't have taxpayers to bail them out in a financial crisis.

Paris intervened because the implosion of Alstom would have dealt a severe blow to industrial national pride.

More than 500 workers at the highly-regarded train care depot in Eastleigh had a reprieve after Alstom confirmed mid-August it was to halve its 10,000-strong workforce in the UK, although not locally.

However, employees are not out of the woods yet - the company said 500 other jobs are to go in the UK once "further restructuring" takes place.

It refused to say where that axe would fall.

Alstom is also the parent company of the French shipyard Chantiers de l'Atlantique, which is building the £550m Queen Mary 2.

The transatlantic cruise liner, the world's biggest, is due to arrive in its home port of Southampton on December 19 amid a spectacular fanfare,

The project has not been affected by Alstom's problems, although there have been unrelated strikes at the yard.

It is understood Brussels can only approve "restructuring aid", which in reality means Alstom must dump some of its assets to restore the balance of competition.

But the French government, which is due to receive a 31.5 per cent stake in Alstom in a partial renationalisation move, fears such disposals would make the troubled company less viable.

Brussels insists that any further aid for the group must get its seal of approval, and multi-level talks are taking place this week.

There is a deadline of September 29.