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Published: 10 November 1998 17:05 GMT
Siemens will only have to pay back a maximum of 40 per cent of the £50m start-up grants it received from the UK government for its North Tyneside semiconductor plant.
UK Trade secretary, Peter Mandelson, told the House of Commons that the government has powers to recover just £18m if the plant closes or grant-funded assets are sold off.
He said the Department of Trade and Industry is helping to find a buyer for the facility, during which time "it would be inappropriate" to seek to recover any of the money.
The plant closure could cost up to 1,100 jobs.
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