Union leaders have given a cautious welcome to news that troubled telecoms firm Marconi, which employs 500 staff in Basildon, is heading for a revival.

The news that the firm's massive debts have been cut slightly and operating loss improved is an indication jobs at the firm's Crompton Close headquarters will be safeguarded, claims the Amalgamated Engineering and Electrical Union.

In its much-anticipated trading update the firm - which had planned to axe 10,000 jobs worldwide earlier this year - reported a reduction in its net debt from £4.44bn to £4.28bn and an improved operating loss of £222m for the first half of the year.

AEEU regional officer Bill Pigram, who represents staff at the factory, said he believed the longer any job loss announcement was delayed, the less likely there would be any cuts.

He said: "I think we have been at the bottom and we are now going up. There still remains high levels of uncertainty here in Basildon but we have gone ten to 12 weeks without any bad news on job losses, which can only be good news for us."

Plans for a possible takeover by London-based financier Duke Street Capital were revealed two weeks ago.

However the private equity company, backed by funds of £600million, has only said it has expressed an interest. Marconi declined comment.

Mr Pigram said: "As every day goes by and there is no announcement of job losses staff are feeling more as ease."

Marconi chief executive Mike Parton said that while trading conditions continued to be "tough", group operating profit and cash flow in the second quarter were in line with our previous guidance.

However he added: "We would be foolish if we didn't think our financial situation was of concern to our customers, but they are now much more reassured."

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