Workers at an Abingdon engineering firm may be forced to uproot after a long-standing wrangle over a new factory site.

Management at medical equipment manufacturers Penlon wanted to continue their 50-year association with the town by moving to a site within its boundaries.

But, after 13 months of arguments over floodplain developments, they have decided to move to Grove or Witney, where a purpose-built assembly plant will be built.

The relocation mean 120 workers will have to travel further to work but management at the firm fear not all of them will be prepared to do so.

Chief executive Peter Tudor said: "It is a decision we take with great reluctance but we must move to a new factory if we are to survive.

"We do not want to move out of Abingdon and it will be a blow to the workforce, many of whom come from Abingdon and surrounding villages."

Engineering manager Richard Eccles, who has worked for Penlon for 35 years, said: "The move will make it very difficult."

Penlon management hope to reach a decision and move into its new assembly plant in 2003.

Developer Discovery Properties has been blocked by the Environment Agency from building industrial units and a hotel on the floodplain off Marcham Road.

Discovery's managing director, Hugo Hawkings, said: "Although Penlon are our first choice to take up the industrial zone, other companies have shown an interest because there are few industrial areas available in Abingdon.

"This is not the end of the matter and we will press ahead, determined to show the Environment Agency, local councils and residents that this scheme can go ahead."

Penlon is one of the world's leading manufacturers of anaesthesia systems. Last year, sales were more than £19m, a £7m rise in five years.