The Oxford-based Lucy group is moving back to the Thame factory from which it made workers redundant two years ago.

The company, which makes electrical switchgear, is also intending to move some of its operation to its premises in Dubai by the end of the year.

Lucy's base in Walton Street, Oxford, will close.

The changes will mean 70 of the 290 workers being made redundant.

Lucy managing director Richard Dick said: "We're moving back to Thame because it makes economic sense to do so.

"We cannot say how many employees we will have there because it all depends what the market situation is like when we complete the move at the end of 2005.

"The premises at Thame were built for 200 employees."

He hoped natural wastage would lead to most of the redundancies, but the group would also consider voluntary redundancies.

Mr Dick added: "We've talked to all our employees and their union representatives and kept them fully informed of what will happen."

The move to Thame should start next year and be completed by the end of 2005.

Thame town clerk Pat Kingsnorth welcomed the move.

She said: "Lucy's were no problem for the time they were in Thame.

"Sometimes they were a bit noisy, but that's all.

"Initial opposition to their coming to the town with fears of smoke and smells never really materialised.

"An alternative put forward for the site was to have it for crushing roadstone and that received a lot of opposition.

"Having Lucy's back will please many people. We were all sorry when they moved out."

A spokesman at South Oxfordshire District Council welcomed the move.

He said: "This will bring employment opportunities back which were lost two years ago and that is to be welcomed."

Residents living near to the site in Thame were pleased at the prospects for the town.

John Carter said: "It will be good to have work back on that site.

"No-one likes to see a factory empty.

"It will certainly be better than any roadstone operation."

Jean Willis said: "They were never much trouble when they were here before.

"I'm surprised to see them back, but I don't think there'll be any complaints."