The owner of KM Harris Tweed Group on Thursday said a proposed deal for the famous Scottish fabric maker had collapsed.

The Hebrides-based firm is the largest maker of the unique Harris Tweed fabric with a 95 per cent share of the market and employs around 200 islanders to hand-weave the wool at home.

The company was put up for sale last August by Derrick Murray ahead of his planned retirement but a deal to sell the business to a group led by Michael Clayton-Gale, a former chief executive of Coburg Coffee, fell through this week.

"Mr Clayton-Gale was not able to raise the required capital so the deal is off," Mr Murray told the Scotsman.

"I'm not going to keep the for sale sign up as I don't think it's good for morale, but if an offer does come along we will certainly look at it."