FIBRE optics company Bookham Technology, once the darling of the stock market, is to buy two businesses from Canadian firm Nortel Networks in a deal which will result in job cuts in the UK.

Under the deal, Bookham will supply the Canadian group with products through a £76.5 million arrangement. In return Nortel will take a near-30 per cent stake in Abingdon-based Bookham.

In July the group announced plans to cut 70 jobs by closing two sites, one at the Faraday Business Park, Dorcan, and in Maryland in the US, in order to reduce costs.

The Swindon site has since ceased to operate, although there is a skeleton staff there.

Bookham chief executive Giorgio Anania said: "We believe that the optical communications market has good long-term potential, though market conditions are currently depressed and likely to remain so for the next several quarters."

Just two and a half years ago the purpose-built Swindon facility, which cost around £2 million, was opened by the company's vice-president and Nobel prize winner, Jack Kilby, inventor of the silicon chip.

But with the virtual collapse of the telecommunications sector, Bookham shares plummeted. Within two years the company's workforce in Swindon had shrunk from 320 to 75 and in March a further 50 were made redundant.