The sports car company TVR is to cease production in the UK, a company spokesman said today.
Around 250 jobs will go at the Blackpool-based company, owned by Russian oligarch Nikolai Smolensky, when production is outsourced to another European country.
There had been hopes that the company would move to another site in the region but workers were informed of the plans today as consultation with unions over redundancies began.
Mr Smolensky, who bought the firm in 2004, said the decision was needed to secure the future of the company.
"We are extremely sorry that, after a period of uncertainty and raised hopes that we could continue production ourselves in Blackpool, we have had to make this decision," he said.
"We need to secure the future of the company and move it forward. I am afraid we see no other way to do so.
"We are acutely aware of the shock and distress this will cause for our staff and their families.
"We will ensure that we meet all our responsibilities towards them over the coming months.
He said he hoped his long-term plans for the company would be a "major advance" for the firm.
"We shall be making further announcements in due course about our plans, which we believe represent a major advance for the proud name of TVR," he said.
"But for the time being, we are concentrating on our staff in Blackpool and the consultation process."
The firm said consultation on redundancies had begun with the Transport and General Workers' Union and counselling was being made available to workers.
TVR is one of the few privately-owned car firms in the UK and specialises in manufacturing high-performance luxury sports cars.
When he bought the firm for around £15 million, Mr Smolensky ruled out large-scale restructuring and said he would invest in new technology and production methods.
But fears for the future of the plant continued as weak sales led to job losses and falls in production.
The future of the plant appeared to have been secured in June when union bosses announced that the firm would move to a different site in the Lancashire town.
But today's announcement dashed workers' hopes and marks another chapter in the decline of the once-proud British motor industry.
The Transport and General Workers' Union, which represents the TVR workers, said the news was bitterly disappointing after hopes had been raised just a few weeks ago that production would stay in Blackpool.
"This is a bitter blow for Blackpool and an iconic British sports car," said Dave McCall, T&G North West regional secretary.
"It is particularly hard to take in after everyone's hopes had been raised just a few months ago when workers who had been laid off were taken back."
He added: "The uncertainty and stress faced by the workforce has been tremendous."Reuse content