Apple has halted the production of iMacs at the LG Electronics plant in South Wales.

Apple's decision to pull the plug on production at the Newport plant was reported in the Welsh national daily newspaper, the Western Mail. It's not known where the European iMac production will now be based.

According to the report, Apple was pressing LG to lower the cost of production, but LG insisted that this would have made its operation unprofitable.

LG Electronics employs about 2,000 staff at its Newport plant, 600 of whom were working on the iMac production line. LG told the Western Mail that Apple's decision would not result in job losses, and said that the iMac operation was only one part of its overall operation.

Leighton Davies, the company's general manager, said "We are not disappointed by this commercial decision, as Apple was only one of many customers. We reached a decision based on the profit contribution the iMac production made to our overall business."

The electronics giant assembles computers for other companies, such as Packard Bell and Gateway, as well as its own brand. LG only made the iMacs' monitors on site - other components had to be brought in from all over the world.