The reassurance came after British Sugar's parent company, Associated British Foods, revealed that changes in European rules were hitting its sugar-producing business.

In a trading update, ABF said it expected interim results in April to show "good growth" in operating profits on the previous year but this was despite a fall in sugar profit in the UK. The company is being squeezed by poor crops due to the wet summer and European Union quota changes designed to prevent overproduction in Europe and encourage greater growth elsewhere in the world.

British Sugar employs about 300 people at its administrative headquarters in Sugar Way, who oversee the paperwork for the company's international operations.

But a spokesman said: "The quota changes have been coming for some years and British Sugar has already acted strategically to counter them.

"For instance, we have moved in South Africa to acquire Illovo Sugar and we also have businesses in China and Poland. About two thirds of our sugar profits and production now come from outside of the UK.

"It means our sugar business, which has its headquarters in Peterborough, is actually poised to move into a period of growth. In fact it is likely to be the biggest growth phase for some time.

"Our staff in Peterborough are running the second largest sugar producing business in the world and we are committed to staying in Peterborough. British Sugar has been here since the mid-1920s and it's a very good location for an international business.

"The city is within easy reach of a number of airports and also has good road and rail links to just about anywhere else in the country."

And there was further good news for the Peterborough base, which is also the administrative hub for ABF's grocery group, which includes the Twinings Ovaltine arm, Allied Bakeries, Ryvita and Silver Spoon. In addition, the centre also control ABF Ingredients and ABF Moira – the second largest year producer.

The trading update revealed its Kingsmill bakeries arm Allied had maintained the improvement seen since the middle of last year and had boosted its contribution to the company's grocery division, with a continued improvement in operational performance and higher volumes.

The firm stated that rising wheat prices had been recovered through price hikes.

Stockbroker for Peterborough-based stockbrokers Varton Robin Morton said that at one point the company's share price had dropped 27p to 849p on the back of the trading update.

He said: "The stock market in general is up and it looks as if investors found the update slightly disappointing. They were obviously hoping for better."

ABF will release its half-year results for the six months to March 1 on April 22.

Primark - still hopes for city store

AB FOODS is also the parent company of the budget clothes retailer Primark, which is the focal point for an internet campaign to bring the store to Peterborough.

Bosses said its sales and profit were 'substantially ahead' of last year, reflecting an increase in selling space and a four per cent increase in like-for-like sales.

Primark's performance has compared favourably with rival Marks & Spencer, which reported a 3.2 per cent fall in general merchandise sales for its third quarter.

The AB Foods spokesman said: "The company has the will and the finance to be in Peterborough – it is just that we cannot find the right site.

He added: "It will happen but there is nothing in the pipeline at the moment."