A DEAL to save the United Milk factory in Westbury could be clinched within two weeks after the team behind the bid secured an agreement on outline proposals.

A business plan tabled by the consortium was accepted on the condition that dairy farmers' support was secured and joint member Milk Link's governing board gave full backing.

The consortium of Dairy Farmers of Britain, Milk Link and First Milk sent contracts to dairy suppliers and investors last week.

Since United Milk called in the receivers over four weeks ago 16 out of 350 dairy suppliers have cut their losses. But bosses behind the potential deal are confident of success.

The plant will stay open until a take-over deal is finalised.

In a joint statement, chief executives from the consortium of three dairy co-operatives said: "Working together we have developed a business plan for the Westbury factory which provides the plant with a commercial future and offers farmers access to intervention markets."

Over 400 dairy farmers invested in the company, which employs 125 local staff, before it went into receivership in August.

A spokesman from receivers Pricewater-houseCoopers, said: "We are in the final stages of talks and in principle a deal has been achieved but it won't be finalised until the dotted line has signatures above it."

Backers behind Dairy farmers of Britain and First Milk pledged support for the consortiums plans but the board of directors at Milk Link are currently in talks to secure final clearance for a deal.

The consortium secured agreement that the plant will remain operational while work on the deal is finalised.

They have issued an assurance to Westbury's direct suppliers and are confident milk will continue to be collected and processed until negotiations are completed.

If a deal is successful the consortium will form Westbury Dairies Ltd and take over the farmers formally linked to United Milk.

A spokesman from NFU said: "We are very encouraged by the development and hope the negotiations succeed.

"It is in the farmers interest for this bid to pass so they can draw a line under it and look to the future."

The proposed deal means the new company will loan money to farmers for the 49 days of milk money lost during the summer as United Milk slipped into receivership.

All repayments will be scrapped if the dairy farmers remain with the consortium for three years.