A WATER company which supplies hundreds of Hampshire homes today announced plans to make 200 job cuts by the end of the year due to ''the current economic climate''.

Wessex Water, which covers part of the New Forest and the south west of England, informed employees this morning.

The majority of jobs will be at Wessex Engineering and Construction Services, which is responsible for laying mains pipes and construction.

The firm started a consultation process today with employees and unions in a bid to find ways of moving staff to other areas of the business A spokesman for Wessex Water said the decision was a result of the ''current economic climate'' as well as a ''severe reduction'' in new development.

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Alan Morgan, head of human resources, said: ''It is regrettable that we have had to make this decision, but unfortunately we are running out of work in some areas of our business.

''We will do everything we can to minimise the number of redundancies and have started a consultation process with staff.''

Wessex Water, which is one of 10 water and sewerage companies in England and Wales, currently employs around 2,500 people.

The redundancies will be throughout the area Wessex Water serves which includes Dorset, Somerset, Bristol, most of Wiltshire and parts of Gloucestershire.