UPDATE 1-Tata Steel plans to cut around 3,000 European jobs-source

Bart H. Meijer and Barbara Lewis

* Tata says there will be no plant closures

* Says aim is to ensure long-term future

* Steel industry battling against costs, excess capacity (Updates with figure on job cuts)

AMSTERDAM/London, Nov 18 (Reuters) - Tata Steel plans to cut around 3,000 jobs across its European operations as it wrestles with excess supply, a source close to the discussions told Reuters on Monday.

Earlier, the group's European chief executive Henrik Adam said Tata was planning to announce job cuts across the European business, which employs around 20,000 people, but did not give figures on job losses.

Following a meeting of Dutch employees, a source told Reuters around 3,000 jobs would go and details would be worked out over the coming weeks.

A Tata spokesman had no immediate comment on the number.

Indian-owned Tata Steel, which launched a transformation programme in June to strengthen its European business, has operations including steelmaking in the Netherlands and Wales and downstream operations across Europe.

There will be no plant closures but the aim is to shield the company against the "huge number of challenges" it faces, Tata said.

"We are working hard on our plans to be operationally cash positive," Adam said.

A company spokesman confirmed Adam's comments originally made to the Financial Times newspaper.

Steel making in Europe has come under strain from international competition and high energy costs, putting large numbers of well-paid jobs under threat.

European steelmakers blame China for the extent of a surplus in the market, but the world's biggest steelmaker says it has made its own deep cuts to capacity.

Britain last week said Chinese steelmaker Jingye has signed a provisional deal to buy British Steel, which went into compulsory liquidation in May.

The agreement is politically resonant ahead of British elections as job opportunities have become a major issue. If confirmed, the rescue could save thousands of jobs.

ArcelorMittal, the world's biggest steelmaker, has idled a series of plants across Europe.

Tata Steel said on Monday challenging market conditions had been made "worse by the use of Europe as a dumping ground for the world's excess capacity".

The company's European transformation programme launched in June aimed to develop "a simpler and leaner organisation, capable of sustainably financing high levels of investment, Tata said.

Changes will include streamlining supply chains and using technology to improve efficiency, as well as seeking to cut employment costs.

Tata's quest to boost profitability follows a European anti-trust decision to block a joint venture with Germany's Thyssenkrupp.

Eurofer, which represents the European steel industry, said in an email job losses were "a worrying and upsetting trend" caused by global overcapacity and hesitant demand.

It urged EU policy makers "to help stabilise the EU market by warding off import surges and supporting vital steel sector workers during this challenging period". (Editing by Jane Merriman)