A BID by a Bury company to invest an estimated £6.3 million in new machinery by selling off land for housing has been dashed.

Deputy Prime Minister John Prescott has dismissed an appeal by Tetrosyl against Bury Council's decision to disallow a redevelopment of the company's Bevis Green works in the town.

Tetrosyl, which manufactures a range of automotive and household goods, wanted to put 300 homes on the Walmersley site, while retaining its head office on the land.

Bosses said money from the sale of the land would have been ploughed back into the business and there would have been no loss of jobs.

But following a public inquiry held in September, the Office of the Deputy Prime Minister has agreed with the inspector's recommendation that the appeal be turned down because the development would conflict with the economic policies of the Unitary Development Plan (UDP) and its housing policies.

The company had argued that the UDP is beyond its envisaged end date and that one its underlying aims was to maintain and protect existing firms. Tetrosyl said its distribution of operations in Bury and Rochdale was cumbersome and involved "avoidable costs" of storage and multiple handling of materials and products.

Tetrosyl has been granted outline planning permission for new buildings at its Heap Bridge site to enable the relocation of the Bevis Green production operations and approval has been given for the renovation of the Walmersley offices.

Mr Prescott took into account that elsewhere in Bury planning permission had been granted for 516 homes since April, with a possible further 323 houses. He agreed that there was no current need for an additional 300 houses and that there is a "significant over-supply" of planning permissions for housing in Bury.

The report revealed the total cost of Tetrosyl's restructuring proposals amounted to £9.3 million - £2.7 million being met from reserves and the balance from the sale of land.

Company secretary Mr Stephen Mort said Tetrosyl would not be challenging the decision in the High Court. He added: "At Bevis Green, we have an under-used and out-of-date asset which was recognised in the report and old buildings unsuitable for modern manufacturing. We wanted to sell the land around our office block, but to keep the block here with the retention of 160 jobs.

"We offered, in evidence, three clear statements. Firstly, there would be no loss of jobs in Bury. Secondly, we would transfer 88 manufacturing jobs to Heap Bridge and upgrade them to more skilled jobs.

"We also offered a legal undertaking giving a commitment by the company to spend the proceeds of the land sale at Heap Bridge on buying all new machinery to make us a very efficient company, able to compete in overseas markets."

Mr Mort said he was "very disappointed" at the appeal decision and said residents unhappy about manufacturing operations at Bevis Green would share his feelings.

Tetrosyl was started by Mr Clifford Schofield in the late 1950s. It commands a firm foothold in the household DIY market. It employs a 650-strong workforce and exports to 75 countries.