THE carpet maker to the Queen will cease production this Friday, with the loss of 138 jobs.

The closure of Hugh Mackay carpets in Durham brings an end to more than a century of manufacturing tradition.

Quality control team leader Anne Robinson, one of the few staff left at the plant, said: "Ideally, we would love to see the company carry on. We are hanging on by our fingernails, but they are being ripped out."

The company went into administration on March 22, after a deal to bring extra investment fell through. About 100 workers were made redundant immediately and more jobs have gone as orders have been completed.

The last shop floor staff will leave at the end of the week, with five workers kept on to help to wind up the business. A spokeswoman for administrators Ernst & Young said: "Production will cease at the end of the week. The administrators will continue to negotiate with interested parties."

The administrators said from the outset that carpet production would end, but are looking at salvaging a smaller operation concentrating on carpet design. It is also believed that another British carpet maker is interested in buying the prestigious Hugh Mackay brand name.

The closure follows LG Philips announcing the shut down of its Durham electronics plant in March, with the loss of 761 jobs.

A task force was set up and the Government pledged more than £500,000 to help to fast track its workforce into new jobs. Workers at Hugh Mackay feel they have been neglected, after the Department of Trade and Industry offered just the statutory aid.

Mrs Robinson said: "We don't think we are any different to Philips workers and feel we should be getting the same sort of help. Durham is losing a lot of skilled people who cannot be replaced."

Hugh Mackay's distinctive Durham Cathedral logo is recognised across the world. Based on the Meadowfield Industrial Estate, it holds a royal warrant and celebrated its 100th anniversary two years ago.

Last month, the firm announced expansion plans and the creation of up to 120 jobs, following a £240,000 grant from regional development agency, One NorthEast.

Less than two weeks later, the company went into administration but by then, the agency had handed over £195,000 and is unlikely to be able to recover the money.

The administrators said they could not comment in detail on an individual creditor.