M & S has ended a 30-year supply agreement with William Baird, whose clothing division made trousers, shirts and lingerie for the high street retailer.

BBC NI's Maggie Swarbrick reports

The company took the decision after undertaking a strategic review of its supply base. M & S has suffered from a drop in sales and is aiming to cut costs by using fewer manufacturers.

Bairds employs approximately 4,500 people who make clothes for M & S and 500 of them work at plants in Newtownards and Bangor, County Down.

Although little has been said about the fate of the local factories and the 13 others across the UK, Bairds said it expects significant redundancies.

Mayor of North Down Marion Smyth said she was shocked at the announcement by M & S.

"The ironic thing in the whole issue is that Bairds were actually on a recruitment drive last week. So it is something out of the blue and we are all very shocked," she said.

Bairds said the decision was a bolt from the blue.

Problems publicised

BBC NI Business Editor James Kerr said: "Marks and Spencers problems have been well publicised.

"The company has made it clear that in an effort to cut costs, it planned to cut its number of suppliers and buy more clothes from developing countries. "

Bairds has closed seven factories over the last 18 months as a result of the troubles endured by Britain's biggest clothes retailer.

However, the decision may not just affect companies owned by Bairds.

Several thousand jobs at other companies in the province also rely on contracts with M & S.