David Boyle told workers at Crosslee in Hipperholme turnover had dropped 27.6 per cent and sales had fallen to the lowest level for 16 years.

"The business took a decision to try and weather the storm last year in hope and anticipation that this year would see a significant improvement in sales volumes and overall trading," he said.

But, raw material costs had risen bet-ween 30 and 80 per cent during the last 12 months, oil prices continued to rise along with gas and electricity, and the pound had weakened.

"At the same time we have seen rising inflation and a huge increase in the general cost of living which has all but curtailed the domestic building industry here in the UK; as well as having a negative effect in consumer spending and the overall general outlook here in the UK for the next 12-18 months is expected to be difficult at best," said Mr Boyle.

The company's key European markets of Spain, Germany, Holland, France and Portugal were also experiencing similar difficulties.

"The company needs to take positive action during these difficult times in order to secure its future position as a leading manufacturer of its products."

Crosslee employs around 500 people with over 300 shopfloor workers.

It has begun consultation with the Department of Trade and Industry and the UNITE Trade Union. The cuts will take effect from October 27.