Two munitions plants owned by BAE Systems are to close with the loss of 200 jobs, the company has confirmed.
The former Royal Ordnance site in Bridgwater, Somerset, will shut by 2007, with 130 job losses.
And a site in Chorley, near Preston, Lancashire, which employs 70 people, will shut by the end of next year.
A spokesman for BAE Systems said unions would be consulted, but that there had been a steady reduction over the last few years in the need for ammunition.
"The Bridgwater plant started production before WWII and employed 2,000 people," he said.
"We always regret this and have not taken it on lightly. We have some capability in the US, but this is about the UK market."
He added that the company had other plants in the UK, and that it was currently developing its plan for its long-term munitions business.
The move was condemned by the union Prospect, which said it threatened the supply of ammunition and explosives to the MoD.
The MoD said it was a matter for BAE Systems.