Northern Foods is stopping production at its Fenland Foods site

The future of more than 700 jobs at a factory which makes Italian ready meals for Marks & Spencer looked bleak after managers announced plans to stop production at the site.

Northern Foods said its Fenland Foods site in Grantham, Lincolnshire, would be "mothballed" from August. It is currently looking for other customers to fill the gap left by the withdrawal of M&S product lines at the plant.

A 90-day consultation process will begin on Tuesday with the 730 workers at the business, which broke even after £45 million of sales during the last financial year.

Northern Foods chief executive Stefan Barden said: "Our immediate task is to support our loyal employees through the consultation period."

The decision to close the factory comes after Marks & Spencer carried out a review of its supplier base. The factory was built for Marks & Spencer in 1987.

Mr Barden said the site could remain mothballed for as long as three years while other opportunities were examined.

He said: "It's a little bit tired. We would want to refurbish it if we were to do something else. Those are the discussions we want to start with other customers.

"Those discussions could take two to three years. It's just unrealistic to keep the workforce on during that time period."

Northern Foods, whose brands include Goodfellas Pizza and Fox's biscuits, employs 11,000 people and has 22 operating sites in the UK and Ireland.

It has sought recently to bolster its fortunes by ditching lower-margin business and refocusing on faster-growing markets such as ready meals, sandwiches and salads and puddings.