Protests have been held around the world

Under pressure from an anti-closure campaign, the firm is also to give �1.5m to the area over the next decade.

Unions and politicians welcomed the offer as a "significant improvement" on previous ones by the company.

They said it was a multi-million pound improvement, but they still did not accept the Treorchy factory's closure.

More than 300 workers will lose their jobs when the plant shuts at the end of the month, although Burberry says more than a third have found alternative work.

The GMB union and local AM Leighton Andrews and Rhondda MP Chris Bryant welcomed the latest offer in a row which has lasted six months.

But they stressed they still did not accept the factory should shut.

"Despite public pressure, and a clear case being made for the continuation of the factory, it is clear Burberry remain committed to closure. We do not accept this," a joint statement said.

"Burberry has offered to provide an ongoing contract to any realistic new venture. We will hold Burberry to this and there will be further discussions about it.

But they agreed the offer on the table now amounts to a multimillion-pound improvement on what was originally offered

More than 300 people will lose their job when the plant closes

They added: "We welcome Burberry's agreement - as a direct result of the campaign in which we have been proud to take part - to provide �150,000 a year for 10 years for a special trust fund for the Rhondda.

British roots

"We look forward to making sure that it makes a real difference to people's lives in the Rhondda. This is a unique achievement by a campaign of this kind."

Burberry announced in September that it would close the factory, transferring production of its designer label polo shirts overseas.

But workers and unions immediately launched their campaign, accusing the firm of abandoning its British roots.

Co-ordinated protests were staged in London, Paris, New York, Chicago, Strasbourg and Las Vegas earlier in February.

A number of celebrities have added their support to the campaign - among them actor Ioan Gruffudd, one of the stars who promotes the distinctive Burberry brand.

Singer Sir Tom Jones, Manchester United manager Sir Alex Ferguson, actors Michael Sheen, Rhys Ifans and Emma Thompson, opera star Bryn Terfel, singer/presenter Charlotte Church and comedian and author Ben Elton have all signed up.

In December Welsh Secretary Peter Hain called on the firm to reconsider its closure decision.

In January Burberry announced it would give �1m to either keep the plant as a going concern or to redevelop the empty site - an offer which was dismissed as a publicity stunt.

This week Burberry told MPs on the Welsh affairs select committee that it was not "commercially viable" to retain the south Wales factory.