The Financial Times said the firm was set to close its 150-year-old Fountain brewery in Edinburgh.

The paper also reported that S&N was considering outsourcing the production of Newcastle Brown Ale from its Tyne Brewery in Newcastle.

The firm - whose UK brands also include John Smiths, Fosters and Kronenbourg - declined to comment on the report.

An S&N spokesman said the speculation stemmed from a research note published by Credit Suisse First Boston a month ago.

The note estimated that a rationalisation of S&N's brewing operations could save the firm �25m a year.

Jobs at risk?

According to the FT, senior S&N executives are due to meet union leaders on Tuesday to discuss the closure plans.

The Fountain brewery currently employs about 180 staff, while another 160 work at the brewery in Newcastle.

SCOTTISH & NEWCASTLE UK BRANDS John Smiths Fosters Kronenbourg 1664 Becks Newcastle Brown Ale Strongbow Woodpecker

If the two did close, it would leave S&N with only three UK breweries - at Tadcaster, Manchester and Reading.

Brian Revell, national officer of the Transport and General Workers Union, said his union strongly opposed any closure plans.

"The breweries highlighted in reports today - Fountain in Edinburgh and Tyne in Newcastle - are the roots of the company," he said.

"It would be entirely wrong for the management of Scottish Courage (the UK division of Scottish & Newcastle) to give in to pressures coming from the City."

New focus

If the Fountain brewery did close, it would be the first time that the company did not have a brewing presence in Scotland.

The origins of S&N stem from the setting up of the William Younger brewery in Leith in 1749.

Last October, S&N sold off its entire pubs estate for �2.5bn in order to cut debts and focus on brewing.

In December, the firm reported an 8% rise in half-year profits to �316m.