The North-East rags trade is operating on borrowed time and will be obsolete within the next few years, it was declared last night.

News that 420 workers had lost their jobs at the Dewhirst clothing factory in Ashington, Northumberland, yesterday added to a catalogue of despair for a once-proud industry that has no hope of competing in the current economic climate.

A further 130 jobs hang in the balance at the ladieswear plant, although Dewhirst said they were safe for the moment.

The Marks and Spencer (M&S) provider has again swung the redundancy axe - this time in favour of moving the production line to Morocco to save on labour costs.

The net result was yet another clothing factory going to the wall and union bosses warn it won't be long before the remaining few follow.

Jackie Woodall, senior organiser with the GMB union, witnessed thousands of redundancies across the industry during a devastating three year period from 1997 to 2000 when 24 factories were closed in Tees Valley and County Durham. In the past seven years as many as 6,000 textile jobs have disappeared.

Only three manufacturing sites still survive in the region, according to the GMB. Sarah Lee Courtaulds, in West Auckland, employs about 200 people making, among other lines, the M&S autograph range; Rainbow, in Skelton, operates a reduced service following 79 redundancies last year and Typhoon, in Redcar, employs about 100 people producing wet and dry suits.

Ms Woodall said: "If you look back over the past three years at what has happened and the fact all jobs here have gone abroad to reduce costs, it does not take much imagination to expect the rest over a period of time to follow that pattern. This is about the greed of the companies to save money. Sometimes clothing manufacturers do not use any imagination and the easiest way to reduce costs is labour. It is a bleak picture for this region."

The decision to close comes just days after GMB officials met Dewhirst management to discuss plans to win a £40m Government contract.

Kevin Curran, GMB regional secretary, said: "I am particularly angry because the GMB has been working hard with Dewhirst to bring new work to the Ashington site from MoD and NHS contracts."

A Dewhirst spokesman last night blamed consumers for the job losses. He said: "This is all linked in with consumer downward pressure on the product. They want more cost-saving, more labour content and they did not want to pay anything more for them."

There will be a 90-day statutory consultation period with the union and employees before the factory closes.