Home Secretary Alan Johnson has urged Morrisons to improve compensation to workers facing redundancy at a factory in his Hull constituency supplying the chain with own-label ready meals.

Northern Foods announced in May the Cavaghan & Gray factory in Hull would close by October after it lost the contract to supply Morrisons ready meals. The closure will result in up to 350 job losses.

Local MP Alan Johnson, who represents the Hull West and Hessle constituency, has met Morrisons managers to discuss extending the contract to give Northern Foods more time to find new business.

"The number one objective is to try to keep Northern operating as a going concern in Hull," he said.

"My discussion [with Northern] suggested if Morrisons waited another six months to the end of the financial year, there would be a chance they could get extra work.

"I've just had that discussion with Morrisons. They are going to talk urgently about that. But I'm not going to change Morrisons' mind that contract is going elsewhere."

If Morrisons did not extend the contract, it should consider making a contribution towards redundancy payments for the Northern Foods workers, said Johnson.

A Morrisons spokeswoman said the retailer was "saddened" by the news of Northern's decision to close its Hull site.

"We had agreed with Northern Foods to extend the terms of the contract to allow them to sustain orders with us at full capacity until October, with a view to providing more time for them to find alternative customers," she said. "Following the meeting, we will continue our discussions with Alan Johnson and Northern Foods."

A Northern spokesman said the company had been forced by Morrisons' ­decision to close its Hull ­facility, and added that it was common practice for retailers to supply motivational "incentive" payments to staff on the termination of own-label contracts.

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