HOPES of saving Smarties and up to 200 jobs at York's Nestle Rowntree factory have been abandoned.

Union leaders say that, having examined technical feedback from the company, they have reluctantly accepted the rationale for moving Smarties production from its traditional York home to another Nestl factory in Hamburg, Germany.

They have also accepted the transfer of Drifters production to the company's Castleford factory, and of Matchmakers to Fawdon, near Newcastle.

However, there was still a glimmer of hope today that a smaller number of jobs could still be saved.

In a joint statement, the company and unions said the impact of the decision on job losses would now be reviewed and steps would be taken to mitigate job losses wherever possible.

A company spokeswoman added: "Now that we have got to this stage in agreeing proposals for the future requirements of our manufacturing business, we will begin to work together with employees and trades unions to assess the impact of the proposals on our people and mitigate job losses wherever possible.

"It is too early to estimate the final impact on job losses."

The joint statement, issued in the wake of a consultation meeting between unions and company last Thursday, also revealed that work would continue to assess the feasibility of retaining some co-packing operations in York.

Nestl announced last September that it intended to shed 645 jobs, move production of several famous brands away from York, sell off part of the site for redevelopment and put the proceeds towards a £20 million modernisation of the rest of the site, where it would continue to make Aero, KitKat, Yorkie, Milky Bar and Polos.

The investment included a new Aero plant, for which a planning application was submitted to City of York Council last month.

The union's counter-proposal, also unveiled last month, could have saved up to 200 of the 645 jobs.

It involved retaining and refurbishing two buildings which Nestl wanted to sell, where products including Aeros and Drifters would be made.

Union leader John Kirk said then that, in the unions' view, the single storey buildings were "fit for purpose".

Both buildings were currently empty, but had previously housed KitKat3 and Square Range.

He admitted that if the company kept those buildings, it would receive a slightly lower capital receipt for its sale of land, but this would be offset by lower costs.

For example, refurbishing the buildings would be cheaper than building a new Aero plant at a cost of almost £5 million.

He said the company would also save the costs of transferring production of Drifter and Matchmaker to other Nestl factories elsewhere in Britain, and save on the transport costs involved in importing Smarties back into the UK from Nestl's factory in Germany.