HUNDREDS of Hampshire workers who believe they were made redundant unfairly have been dealt a bitter blow by a European inquiry.

It has ruled that no action will be taken over allegations that a £50m grant from the Italian government led to Pirelli switching production from Bishopstoke to Italy.

However, Hampshire MEP Chris Huhne is calling for a change in EU law because he believes the European Commission failed to take into account vital information when it approved the grant.

It looked at figures up to the end of 2001 that showed the fibre optics market was expanding and therefore concluded that the company also needed to expand and build a new factory in Italy.

However economic forecasts - which proved correct - for 2002 showed a steep decline in the sector and strongly indicated Pirelli would have to cut back rather than grow.

Crucially the Commission cannot consider such forecasts.

Mr Huhne believes that had this information been available to the Commission the grant would have been turned down as it was clear Pirelli would soon be cutting production.

He also says a lingering suspicion remains that the company directly relocated more than 300 jobs from Bishopstoke to Battipaglia near Naples, although the Commission has not been able to prove this.

Pirelli declined to comment.

Under European law a direct transfer of production from one European country to another supported by a governmental grant is outlawed.

Mr Huhne and Southampton based Transport and General Workers union official Colin Lumber are convinced that the same fibre optics produced at Bishopstoke are now being made in Battipaglia.

The MEP is appealing for any ex workers who have evidence that machines and equipment were shipped to Italy to come forward as this is the only way to resurrect the investigation. He said: "I can assure any whistleblower that they can give evidence in confidence. This decision could still be overturned."