The new owners of Morrells say the historic brewery will stop producing beer within weeks.

Lager production at the St Thomas's brewery, Oxford, has already been halted.

And now the company is close to naming the medium-sized brewer which will be producing Morrells brands under contract outside Oxford.

New chief executive Paul Beadle said that some compulsory redundancies would inevitably follow.

But he hoped in the long run, more jobs would be created than lost by the Morrells sale, completed on Friday.

Mr Beadle rejected claims that the new owners were simply "out to make a fast buck" by selling off the 132 pub estate for a vast profit. He said: "We are looking to acquire other pubs as the opportunities present themselves.

"Far from selling the pubs, we see the Morrells estate as an excellent foundation on which to build our business."

The company was bought last month from the Morrell family by pub chain tycoon Michael Cannon for £48m.

Brewery and delivery workers will face more interviews this week, with an undisclosed number of the 77 staff ready to accept voluntary redundancy. Mr Beadle said: "We have not asked anyone to leave yet. A redundancy package has been drawn up and we will honour that." He repeated his hope that the majority of workers could transfer to delivery services or even pubs.

Negotiations were at an advanced stage with a brewery, which would produce Varsity, Graduate and Oxford ale. But the new company, Morrells of Oxford, still has plans of creating a "micro brewery" to ensure 500 years of brewing continues in the city.

But this would produce only a few hundred barrels weekly for a limited number of local pubs.

Meanwhile, Mr Beadle promised to work closely with Oxford City Council about the development of the site.

He confirmed Oxford University colleges had expressed serious interest.

Mr Beadle added: "We will be investing heavily to ensure that Morrells pubs are among the best in the country."

The Berinsfield Arms, Berinsfield, which closed in September, would be the first to benefit from new investment.

Buildings on the site of Morrells' Brewery do not have enough architectural or historic interest to be listed, the Department for Culture, Media and Sport has told the city council.

English Heritage advised the department that the St Thomas's Street brewery had been altered so much that "it no longer represents a sufficiently intact example of a Victorian brewery".

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