Leicestershire-based Richard Roberts was said to be "devastated" at the move, which is understood to have put as many as 900 jobs under threat.

The company has factories in Leicester, Hinckley and Kirkby-in-Ashfield, Nottinghamshire, as well as a small chain of retail shops in the East Midlands.

An M&S spokesman said it was not planning to de-list any more companies in the immediate future.

'Never easy'

"We are having to disengage from certain small suppliers and unfortunately Richard Roberts is one of those," he said.

"It's never an easy decision and it's not something we take lightly, but we have to compete on a level playing field with the rest of the high street."

The company's decision follows an announcement on Tuesday that it would cut William Baird and Daks Simpson from its supplier list to allow it to bring its prices into line with other high street stores.

Marks & Spencer plans to reduce its supply costs by �450m by buying more goods from cheaper overseas manufacturers.

Supplies to Marks & Spencer by the firm's knitwear division, Richard Roberts Knitwear, based in Leicester and Hinckley, account for 70% of the division's turnover.

Richard Roberts' group corporate director Dennis Hall said: "There will be job losses, but these will very much depend upon ongoing discussions with Marks & Spencer."