A Borders weaving firm fears it could lose a contract to supply the British army with tartan.
Robert Noble fears it could lose the army contract after decades
Robert Noble in Peebles says the Ministry of Defence will decide the contract for the new Royal Regiment of Scotland by competitive tendering.
The MoD says it must look for best value and the contract is open to any company anywhere in the world.
The company said this move could mean Scottish soldiers wearing tartan made outside their home nation.
Managing director Roland Brett said that while he understood the need for competitive tendering he felt the company's expertise should be taken into account.
"There is now a risk that the Scottish soldiers are going to be wearing a kilt that is not made in Scotland and a fabric that is not woven in Scotland," he said.
"We have a Scottish industry and we are not supporting it."
An MoD spokesman confirmed a small number of kilts had already been purchased, with a total of 5,000 required in due course.
He said it would follow public procurement regulations and that companies which could meet the regiment's requirements while providing best value for the UK taxpayer were encouraged to apply.
"This includes both previous cloth suppliers and the Scottish company who provided the initial small order," said the spokesman.
The local Lib Dem MSP Jeremy Purvis said it would be a "slap in the face" for his area.
"The company in Peebles has been making the highest quality cloth in the traditional way for the MoD for 30 years," he said.
"It is outrageous that the MoD would actually think that it could get away with this and I hope that it changes its mind and it does so straight away."