Courtaulds Ladieswear has drawn up plans for the closure of one of its remaining UK factories.

The company has begun consultations with employees about the future of its stitching operation at Peterlee in County Durham. It says the talks will be about whether there are any realistic alternatives to the closure of the plant.

Closure would result in the loss of 300 jobs in production. Another 70 people in the pressing and cutting room operations are also likely to lose their jobs unless the factory can be saved. Courtaulds is holding out little hope of a rescue, however.

"I am sorry to make this proposal but we must recognise the competitive pressures we face," said John McClure, general manager of Courtaulds Ladieswear. "The highly competitive nature of our market means that we can see no alternative. If the closure proposal is confirmed, our human resources team will provide help to employees to find alternative work or retraining opportunities."

The company said that the clothing industry had been facing very severe competitive pressures for some time. Shoppers were seeking ever lower prices on the high street and retailers were competing for sales by reducing prices. It said that the problem was intensified by the wide availability of lower cost imported garments. This meant that the company was now unable to make many of its products profitably in the UK.

Courtaulds Ladieswear currently employs 1,850 people in the UK at sites in Peterlee, West Auckland and Rotherham. Another 2,230 are employed in overseas factories in Morocco and China.

A Courtaulds spokesman insisted that the closure proposals for Peterlee had been drawn up locally and did not affect other parts of the company. If the stitching operation does close it will leave a workforce of 200 at the company's warehouse in the town.

Whilst many workers were said to be shocked by the news, one local representative of the GMB union said that many others had expected the worst after no new work had arrived in the factory over the past fortnight.

Union representatives were meeting with managers again today. They say they will be doing everything possible to try to save the factory.

By Clive Hinchliffe