Staff at the ChoicesUK depot, in Southgate Way, Orton Southgate, were left in tears yesterday after it was announced that the base was to shut this summer.

It comes after months of uncertainty for staff, after ChoicesUK, which distributes DVDs, CDs and computer games, went into administration last August, only to be bought by the Staffordshire-based Webb Group.

An emotional worker, who refused to be identified, spoke of the sense of betrayal among the workforce, who felt they had done enough to secure their future after the company's rescue.

He said: "I feel I have been stabbed in the back because we have put in a lot of effort when the company went into administration, and it said it needed us.

"Everyone was on a high. We knew we had our jobs through Christmas and then it has basically said 'goodbye, we don't need you'."

He said a lot of staff had been left in tears by the announcement and some had snapped fiercely at the commercial director as he had explained the reasons for the planned closure.

But managing director Bernard Kumeta said: "ChoicesUK was losing money and went into administration last year.

"We have been reviewing the business continuously since then, and we are now convinced that we should transfer its head office activities to the Webb Group's head office in Burton-on-Trent and move the warehouse to the Webb Group's Bradford facility.

"This will reduce costs, increase operational efficiency and integrate the business into the Webb infrastructure."

He added: "We shall, of course, be consulting with employee representatives at Peterborough and plan a phased transfer of activities that is scheduled for completion between June and September."

Mr Kumeta added: "The proposals are part of a rationalisation programme within the business, and we have embarked on a 90-day consultation period with staff."

ChoicesUK, which at its height employed 1,700 people at 170 outlets and stores went into administration last August as it struggled to make money in an increasingly tough market and blamed piracy and competition from supermarkets and the internet for its problems.

The increasingly difficult trading conditions were underlined three weeks ago when the Peterborough-based DVD distributor Lovefilm, which employs 140 people, strengthened its business by buying Amazon's UK DVD rental business, as part of a £200 million deal, which also made Amazon the largest shareholder in Lovefilm.

Chief executive of Peterborough Chamber of Commerce John Bridge said: "This is very sad news for the people who work for the company.

"It is due to the particular difficulties in the entertainments market place and not a reflection of the Peterborough economy, which is still doing extremely well."