Sacked Peugeot workers will be helped to find new jobs and training, Trade and Industry Secretary Alan Johnson vowed.

There will also be support for firms in the supply chain, the Government said. However, the scale of aid is expected to be significantly less than the £155.6 million provided to the Rover Task Force by the Treasury.

Mr Johnson said: "With our regional partners and Jobcentre Plus, we will do everything we can to support those affected, be it at Ryton or in the supply chain, and to help them to find new employment or, where required, to retrain.

"We will be looking to Peugeot to assist us in this, including the exploration of options for the future use of the Ryton site."

Mr Johnson said he was "extremely disappointed" by Peugeot's decision, and pointed out that the Government had offered a grant of £14.4 million towards the cost of developing the plant, to allow new models to be built there.

Officials hope the effects on the West Midland economy will be far less dramatic than the damage caused by the closure of Rover last year.

Fewer jobs are being lost, and three quarters of Ryton's parts are sourced from France rather than the West Midlands.

The Department of Trade and Industry is expected to work directly with agencies such as Jobcentre Plus and the Learning and Skills Council as well as Coventry City Council, rather than creating a new task force.

Coventry MPs were in discussions with Trade and Industry Minister Alan Michael yesterday.

Jim Cunningham (Lab Coventry South) said: "It is a slap in the face to the workers at Ryton. It is a bitter pill for them and their families. I am certain the company knew for the past two years what it was going to do."

Mr Cunningham highlighted Peugeot's admission last year that it had turned down the offer of a £14.4 million grant to develop the Ryton site.

"I knew when they didn't take up the development offer that something was afoot. I believe it is because there is cheaper labour in Eastern Europe.

"They have had excellent industrial relations at Ryton. The unions and workers co-operated with the management. Productivity and quality increased significantly."

West Midlands Labour MEP Michael Cashman said: "The workforce at Ryton have worked really hard to bring the plant round over the last few years. They deserve better than this."

Warwickshire MP Caroline Spelman (Con Meriden) said: "This is a bitter blow, only a year after Rover.

"Our concern is that so few of the Longbridge workers managed to find alternative employment in the car industry.

"When the workers streamed out of Long-bridge last April they said they were trained to make cars. The challenge is how as a region do we create alternative employment appropriate for their skills?"

Liz Lynne, Liberal Democrat MEP for the West Midlands, said: "It is vital now that Peugeot-Citroen do everything they can to provide support for their staff, and help as many as possible find alternative employment."

West Midlands Conservative MEPs issued a statement saying they were "shocked and saddened to hear that PSA cannot sustain car assembly at Ryton within its global manufacturing operations".

The statement went on: "In recent years, the plant has had an excellent record for flexibility, productivity and quality. However, when PSA took the decision not to tool up Ryton for the new 2007 model, it was clear that it had doubts about long-term manufacturing here.

"PSA tells us that it has carried out a detailed study that shows the cost disadvantages of the Ryton operation compared to its France and Slovakia plants. We hope that PSA will now share these findings with us, without delay. We must learn from this crisis and find out why PSA considers the UK no longer to be globally competitive. If transport costs - as have been indicated - are a real problem, then we must demand action from Government in road and ship investment.

"We must use our experience of other automotive job losses in the West Midlands region to mobilise all possible support to find new jobs and retrain and reemploy the loyal and effective workforce."