The loss of 500 south Wales air defence repair jobs is the biggest blow yet to workers who have been fighting a rearguard action for many months.
The Defence Aviation Repair Agency (Dara) site at RAF St Athan was the biggest of its four sites, at one time employing more than 1,900 staff.
That was due to fall from 1,100 to 800 even before Tuesday's confirmation of the closure of the fast jet operation.
Unions and MPs have said they fear Dara could suffer "death by 1,000 cuts".
Armed Forces Minister Adam Ingram announced in the House of Commons on Tuesday that the Dara fast jet facility at St Athan would shut by April 2007.
Mr Ingram also said that Dara's large aircraft business at St Athan will be "taken to market" to test whether its sale could deliver improved effectiveness and value for money.
There was better news, however, for the 600 staff at Dara's electronics business in Flintshire, which Mr Ingram said would be kept within MoD ownership.
It was another dramatic development in the short history of Dara since it was set up in 1999, bringing together RAF and naval repair operations with the aim of cutting maintenance costs of military aircraft.
It is run as a civilian arm of the Ministry of Defence, and competes with both the private sector and the RAF for contracts.
It has been a significant employer in both north and south Wales, while its other sites are at Almondbank near Perth in Scotland and Fleetlands near Portsmouth.
Fears over Dara's future led to 200 St Athan workers lobbying the Labour Party conference in Brighton in September, among them men who had left the RAF to join the agency because they hoped for greater job security.
The latest announcement comes three years after Mr Ingram welcomed news of a new £77m super hangar at St Athan to service Harriers and Tornado jets.
The hangar was built with taxpayers' money as part of Project Red Dragon, whose intention was to develop a world-class aviation centre centring on Dara at St Athan.
The hangar was opened earlier this year, but now the RAF's 69 Harriers are being serviced at RAF Cottesmore in Rutland and work on its 139 Tornadoes will be transferred to RAF Marham in Norfolk in four years.
Campaigners fear St Athan as a whole may no longer be viable without the Tornado work.
According to Dara, total public sector investment in the St Athan base is due to reach £50m.
The union Amicus and the MoD have also been arguing about the suitability of RAF technicians to do the work formerly carried out by Dara.
BBC Wales' Dragon's Eye programme last week reported Amicus claims to have evidence that eight Harriers have been damaged at RAF Cottesmore.
But the MoD said that claim had no basis in truth.
The union and the MoD have also disagreed about the time it is taking to return planes to the air after servicing. The MoD said that since work was transferred to Cottesmore it had 12 more Harriers available than when Dara had the contract.
MPs on the Commons defence select committee are due to visit St Athan this month as part of an inquiry into RAF capability.
Dragon's Eye also reported another row between the union and the MoD over evidence. Amicus has claimed that the MoD tried to prevent it putting forward some of the strongest evidence on the grounds that it was restricted.
But an MoD spokesman said he utterly refuted the union's claim, adding that it was up to the committee what it made public.
Workers at St Athan believe their work will ultimately be privatised and cost more. But the MoD claims to have saved £10m so far by moving the Harriers contract, and £40m with the Tornadoes.