Workers at the factory may be offered alternative jobs

In a statement on Friday, the Japanese company - one of Wales' longest-serving inward investors - said the decision had been taken because of competition abroad.

It is believed that talks are under way to transfer production to the Czech Republic.

Cardiff Central Assembly Member Jenny Randerson described it as "desperate news for the Welsh economy".

"These are the types of jobs that are much needed in Wales and to lose 600 in one fell swoop demonstrates the grave situation the economy here finds itself in."

Panasonic assistant general manager Brendan Gore said there was increasing competition from all global manufacturers and sharply falling prices.

We have been here before - Panasonic lost 1,000 jobs a couple of years ago when they moved manufacturing to the Czech Republic Jon Owen Jones MP

"If I look at an integrated digital television two years ago, it cost �350. Then one year ago it's down to �268 - that's a 24% price drop in one year."

He added: "Up to 600 jobs will be affected by the proposal but we can't say how many would result in redundancies yet. It's too early to get into any specific figures."

Jon Owen Jones, MP for Cardiff Central, it was a case of more of the same.

"We have been here before," he said. "Panasonic lost 1,000 jobs a couple of years ago when they moved manufacturing to the Czech Republic.

"When I think back five or six years, we had Hitachi in south Wales, we had Sony manufacturing - we manufactured more TV sets than any other part of Europe. All this is now going."

Some 405 workers at the plant in Pentwyn, will be kept on to continue working on research and development and the production of microwave oven and notebook computer operations.

Parent company Matsushita Electric (UK) Ltd's Managing Director Junro Nakamura said "Unfortunately, in the light of significant trading losses resulting from increasing competition and price erosion, we are proposing to cease our TV and set-top box manufacturing operations here in Cardiff by the end of 2004.

Panasonic is one of Wales' longest-standing inward investors

"We will consult thoroughly with our employees and unions on this issue and very much regret the concern that will be caused to them by this proposal."

In October 2000, blaming uncertainty over the UK's entry into the euro, the company cut 700 permanent and 600 temporary posts because of a production switch to Eastern Europe.

As Wales' electronics industry takes a further nose dive, MP Jon Owen Jones said a system needed to be put in place to maintain manufacturing, not based on old industries but on developing new ones.

Welsh Assembly Economic Development Minister Andrew Davies said talks would be held to establish the company's future plans and that assistance would be given to those made redundant.