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Tata Steel has announced 180 jobs are to go at its plant in Shotton, Flintshire.

Staff were told its Living Solutions arm, which makes prefabricated buildings, will close as Tata concentrates on core business.

Living Solutions was set up in 2003 so former owners Corus could diversify but it has never been profitable.

Tata blamed a weak building industry and the end of a defence supply contract.

The company stressed Living Solutions' closure would not affect the rest of its operations, with 800 people employed at Shotton.

Andrew Black, managing director of Tata Steel Building Systems, said the decision was taken "with great regret" after a detailed review, and blamed the "continuing weak construction market" and the end of a long-term contract to supply accommodation for the defence industry.

"Living Solutions has been unable to establish sufficient market presence to justify continuing with the business, which has never been profitable," said Mr Black.

"Clearly this is a very difficult time for our colleagues at Living Solutions and I would like to pay tribute to everyone who has worked so hard to try to develop this business venture."

The company make portable-style buildings, the customers including the Army, as well as the student accommodation sector.

Mr Black said the modular buildings sector was "highly competitive" and the company had already tried to address the problems by cutting costs but there were "no prospects of generating viable new business".

The company has supplied buildings for an upgrade of Ministry of Defence garrisons at Aldershot and around Salisbury Plain as part of a six-year £92m contract.

A Welsh Assembly Government spokesman said the news was "very disappointing" and they were looking to meet Tata as soon as possible.

The spokesman added: "Tata are a central part of the Welsh economy and we hope the company can avoid any compulsory redundancies and find jobs for these workers in other parts of the organisation.

"If this decision goes ahead, we will look to provide all the support possible to help these employees find new work."

Earlier, Peter Hughes, of the Unite union, said: "I hope this is not a sign of things to come. Our concern would be that that part of the site was bringing in a lot of income.

"The worry now is that the rest of the site will have to absorb the costs of the site."

Unite represents about 450 of Shotton's 800 workforce.

Mr Hughes said most of the staff losing their jobs were taken on as new employees when Living Solutions was launched.

Mark Tami, MP for Alyn and Deeside, said the news was "devastating".

Carl Sargeant AM, Minister for Social Justice and Local Government, said talks would be held with Tata, adding: "These people have been loyal to Corus and deserve to be protected from unemployment."

The Idian steel-maker Tata bought Anglo-Dutch firm Corus in a £4.3bn ($8.1bn) takeover in 2006.

When it opened, Corus Living Solutions was seen as a way for the steel-maker to branch out in the future.

In 2004, Edwina Hart, then minister responsible for social housing, claimed the company's steel-framed units could help ease a housing shortages in Wales.