HUNDREDS of jobs are hanging in the balance after the former Kays firm announced it is now looking to leave Droitwich.

Historic Worcester firm Kays, which closed its city factory in February with the loss of 700 jobs, is seeking to move its sort centre from Droitwich to Coventry.

If the move goes ahead it could mean around 400 people would either have to relocate or take redundancy. The move could also see the remaining workforce of about 70 at the Worcester site in Bransford Road relocate to the former Peugeot car plant site at Ryton-on-Dunsmore near Coventry. Senior shop steward Alan Davies, who has worked for the company for 36 years, said staff were told about the proposal on Tuesday. He described the news as a "bitter blow" for the town and its surrounding areas.

"We knew the sort (centre) was going to be relocated," he said. "We were hoping for somewhere local i.e. within 10 miles. The company did say it didn't want to move too far away because it didn't want to lose its workforce. I can understand them moving it there (Coventry) if they couldn't find a site big enough locally. It is an ideal place for them when you think about it - it's massive and they have got the motorway and airport just up the road."

In 2004 when the then Trade Secretary Patricia Hewitt approved a £450m merger of Shop Direct, the former Kays, some 2,406 Worcester workers and 468 Droitwich staff thought their jobs were safe.

Following this week's announcement that Trenport Investments Limited had acquired the Peugeot site, its sister company Home Delivery Network Ltd (HDNL) - which is a part of what used to be called Reality, formerly Kays - requested Trenport include an outline planning application for a replacement sort centre as a major part of its planning application.

Group corporate communications director David Boardman said employees have known for sometime the company has been reviewing its situation, but could not say whether all operations would move from its current site at the Berryhill Industrial Estate in Westbank, Droitwich, because the planning application is in its early stages.

However, the company said the new site could be operational by the middle of 2009, if the relevant planning approvals are granted.

Mid-Worcestershire MP Peter Luff said although he was concerned about the plans, he did not want people to panic.

"After talking with a representative from HDNL it does seem to me very likely that within a couple of years these jobs could well move to the old Peugeot plant at Coventry," he said. "This matter is of great concern to the town and in particular to the people whose jobs are affected." However, he said he was optimistic another major company would fill the site if HNDL decides to leave.

"Droitwich is a very sought- after place at present although it's obviously bad news in the short-term I would not be pessimistic about the long-term impact on Droitwich."