Sports car company TVR is to cease production in the UK, with the loss of 250 jobs at its factory in Blackpool.
The move sees the company go back on an earlier agreement to keep production in the Lancashire seaside town.
TVR, which was bought by young Russian tycoon Nikolai Smolensky in 2004, said it was now in consultation with unions over redundancies.
The Transport and General Workers' Union said it was bitterly disappointed at the decision.
Speculation that the firm would move production to another European country had been growing since the start of the year.
It is now expected to open a new factory within the next three months.
Yet only last month TVR said it would be staying in Blackpool, firstly at its current site in Bispham until 2008, and then at a new permanent home at Blackpool Business Park.
In April the firm temporarily stood down 71 members of staff because of flagging demand, which was said to have fallen from 12 cars a week to just two.
While TVR is renowned for offering high performance cars at a competitive price, it is also fair to say that its vehicles have suffered from reliability issues in recent years.
Established in 1947, TVR is Britain's largest independent sports carmaker.
It was founded by Trevor Wilkinson, who used three consonants from his first name for the company title.
"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."