The minister denied that the money, which came following a recommendation from the textile industry's strategy group, would have little effect on the industry's problems when spread across the United Kingdom.

Patricia Hewitt: "Support for firms and workers"

She said: "We're really doing two things. One is a package of support to help textiles firms become and stay competitive in the face of intense global competition.

"The other part of the package is direct help to workers who have lost their jobs, particularly to get re-training and new skills to get new jobs."

"It's the first tranche of help and it's what the industry has been asking for."

The minister said other funding would be available via regional selective assistance and European programmes.

Scottish strategy

Scottish Enterprise Minister, Henry McLeish, also said the 12-point plan would apply to Scotland, where about 30,000 people are employed in textiles.

The Scottish Executive was developing its own strategy, which will be driven by the Scottish Textiles Forum, to be launched on Monday.

He particularly welcomed the establishment by Heriot-Watt University of a Centre of Manufacturing Excellence in Galashiels.

Job cuts gloom

200 - Coats Viyella (March 1999) 660 - Levi (September) 300 - Russell Europe (October ) 140 - Pringle (February) 1000 - Baird Clothing (March) 600 - Daks Simpson (March) 290 - Laidlaw and Fairgrieve (May)

The Scottish economy has suffered a series of blows following the closure of textiles mills in recent years, with the Scottish Borders one of the areas worst affected.

Borders Council convener, Drew Tully, said the amount announced was not significant but he expressed relief that the government was beginning to address the industry's difficulties.

He said: "It's not a great deal in UK terms but it is at least a recognition of a textiles industry that needs help.

"We still see a viable industry in textiles, despite all the troubles we've seen in recent years.

"We still have 4,000 people employed in textiles in the Borders and any help to those people is more than welcome."

Substantial contracts

Last week, Dawson International announced the closure of two of its mills in Selkirk and in Dalkeith with the loss of nearly 300 jobs.

That followed job losses and closures at Daks Simpson and Baird Clothing, both of which lost substantial contracts with Marks and Spencer.

Russell Europe and Levi have also been forced to cut jobs in the face of stiff overseas competition.

An estimated 70,000 jobs have been lost in textiles across the UK since 1997 with companies under pressure from the strong pound and the need to look to source more goods abroad to cut costs.