Defence giant BAe Systems is to close three factories, including one in Telford, with the loss of 500 jobs, partly because of the withdrawal of British troops from Iraq.

The sites in Shropshire, Guildford in Surrey and Leeds will close within the year, with some compulsory redundancies expected.

All the sites are in the company's Global Combat Systems Vehicles and Weapons businesses, which currently employ 1,820 people in the UK.

A further 50 jobs will be lost in Newcastle, seven in Leicester and 90 at the firm's weapons business in Barrow, while 30 posts will be cut through efficiency measures.

BAe said that as part of its "transformation programme" around 100 roles from the sites which are closing will be transferred to Leicester and Newcastle.

The company said it will take other measures to mitigate the impact on employees, including providing re-training and support in finding new roles inside or outside the organisation.

"We must consolidate a fragmented site infrastructure to reduce fixed overheads, whilst at the same time transforming our skills mix to increase our UK focus on systems integration and win orders internationally," said Global Combat Systems Managing Director David Allott.

"While we clearly regret having to take this step, our forecast UK order intake has reduced and we have to match the size of our business appropriately to the projected nature and volume of workload."

BAe said the announcement followed a decision by the Ministry of Defence to postpone a utility vehicle contract as well as a downturn in work supporting British Army operations in Iraq and Afghanistan.

The cuts were unveiled on the day that British forces formally ended combat operations in Iraq, handing over control of the main coalition military base in Basra to US forces.