UNFAIR cash incentives from the Italian government could be behind Pirelli's decision to shed 185 jobs at its Eastleigh factory and move production to Italy, claim the town's MP and MEP.

Job cuts at the giant Bishopstoke plant were announced last week, as reported in the Daily Echo, and were blamed on a downturn in orders for optical fibre due to the "sudden cessation" of expansion programmes in the telecommunications industry.

But Eastleigh's MP David Chidgey and MEP Chris Huhne are concerned that the Italian government may have lured

production to a factory near Naples with subsidies and have called for a full inquiry.

Mr Huhne said: "There are strict rules banning unfair subsidies in the European Union and I am determined to make sure they have been followed in this case.

"I will be putting down formal questions in the European Parliament and taking the matter up directly with the European Commissioner responsible for fair competition."

Mr Chidgey said: "Like so many local people, I was shocked and saddened by the decision to axe most of the jobs at the Pirelli factory. Like the railway works, Pirelli was the backbone of our local economy for many decades.

"With this latest announcement, a workforce which once numbered thousands is reduced to a few hundred."

John Tierney, Pirelli's human resources director refused to deny an unfair subsidy.

He said: "The factory in Italy is technologically more advanced, its facilities are better and its overall capacity is larger. We can make all of our requirements from one large factory.

Mr Tierney said the company was undergoing a restructuring process which would involve job losses but he did not know if jobs had been cut at the Italian factory.

The Bishopstoke plant will now be mothballed so production can be restarted if market conditions improve.

The rest of the company's activities at the factory will be unaffected and it remains the commercial HQ for Pirelli's UK telecommunications division.