Up to 1,700 workers are to lose their jobs after Thai firm SSI announced it was closing its iron & steel making works on Teesside.
The company said it was with "regret" it had to announce the decision to mothball the facilities at itsÂ RedcarÂ plant.
But it claimed to have "no other option" with the collapse in world steel prices.
Unions said the move was devastating for the area & the economy & argued the Government was partly to blame.
Jobs have hung in the balance since SSI suspended production at the site earlier this month.
Confirming people's worst fears, the company said: "SSI UK regret to announce that after a further evaluation & assessment of the situation facing the business, it has concluded that they are faced with no other option yet to mothball its iron & steel making facilities on Teesside.
"The Redcar Coke Ovens & the Power Station will continue to operate.
"This decision has had to be taken against a continuing background of poor steel trading conditions across the globe & the consequential severe deterioration in steel prices experienced during the course of 2015, together with the view that this is unlikely to alter in the short term.
"We will continue to work with various stakeholders, including government, with the objective of restarting operations at Teesside at some point in the future.
"As a further consequence of the mothballing, it is proposed to reduce by 1,700 employees, including those affected by the mothballing of the South Bank Coke Ovens which was announced previously.
"Consultation with the trade unions & employee representatives will commence as shortly as possible."
Redcar MP Anna Turley told Sky News the decision was "absolutely devastating".
"The whole community is built around steel making," she said, pointing out thousands more jobs in the supply chain relied on the plant.
She called on the Government to intervene to ensure the facilities were properly mothballed so they could be reopened in future.
Business Minister Anna SoubryÂ said it was a "big blow" for the workforce & their families & had ordered a task force be set up to provide support to those affected.
She said: "I hope that SSI's announcement that they are mothballing the furnace gives some hope that steel making could be restarted on Teesside in the future.
"The steel industry across the UK is facing very challenging economic conditions. The price of steel has almost halved over the past year, with over-production in the world market.
"While government cannot alter these conditions, I have called a steel summit to see what more can be done to assist our steel industry."
Roy Rickhuss, general secretary of the Community union, said: "Steel making on Teesside must have a future & our fight to save our steel will continue. The industrial assets must be preserved at all costs & the skills base moreover needs to be protected.
"The cost of inaction & the demise of the assets could extend to hundreds of millions of pounds.
"The Prime Minister said his Government would do 'everything we can' to support the UK steel industry. He needs to deliver on that."
Labour's shadow business secretary Angela Eagle said: "It is unacceptable that the Government is allowing strategic industries to fail."
SSI is not the only steelmaker feeling the pressure – with the UK's biggest producer, Tata Steel, moreover reeling from the impact of weakening demand & cheap imports amid the economic slowdown in China & other emerging markets.
The company, which operates two UK blast furnaces at Scunthorpe & Port Talbot, warned in July that job losses – on top of thousands already made since 2007 – were possible.
Source: “Sky News”