This is the death knell, because they were the biggest employer in the area

Local trader

He said he also believed the company could be on the verge of winning an order from Oman for its newest EH101 Merlin helicopters.

The job cuts were announced as the company neared completion of a contract to supply more than 60 Merlins to the British armed forces.

Mr Laws said: "It's not the beginning, we very much hope, of a long-term decline.

"Westland are working very hard indeed to secure orders in places such as Oman.

'Death knell'

"They have just won orders from Denmark and Portugal.

"We have got to get these UK orders.

"If we can succeed in doing that we will be able to stabilise the situation."

Work is dropping away for the Yeovil plant

The job cuts are expected to hit the local economy hard.

One town trader told BBC Somerset Sound: "We were here a few years ago when they lost half the factory.

"This is the death knell because they were the biggest employer in the area."

Dorothy Fog, regional organiser of the MSF union, said talks were being set up with Westland.

"We hope to have two meetings a week at least to see whether there is any input we can make that will actually reduce the number of job losses."

No intervention

Robin Cook, leader of the House of Commons, said the government could not intervene in Westland's decision.

Although ministers had to consider the "strategic importance" of its domestic weapons industries, he said, ultimately companies must make their own decisions about the size of their workforce.

The company, which makes the Lynx, Apache, and EH101 Merlin helicopters, merged with an Italian partner Agusta in 1999.

In late 2001 Westland received an order from Portugal for 12 Merlins.

In September, the company signed a �230m deal to supply Denmark with 14 of the aircraft.

An order from Thailand for two Merlins was worth �25m.