A government-owned firm that employs disabled workers plans to close or merge 28 of its factories, putting 1,600 jobs at risk.
Managers at Remploy have told ministers that they want to merge 11 plants and close 17 factories.
Unions have condemned the announcement as an "absolute disgrace".
Fewer factories may close than originally planned, however, because of savings and the promise of more public procurement orders.
Acceptable loss
Remploy Chief Executive Bob Warner said on Monday that the firm now wanted 55 factories to remain open - up from 40 under the original plans - subject to satisfactory progress towards an "acceptable loss per disabled employee."
The company currently has more than 6,000 disabled employees in 83 factories around the UK, making products such as school furniture, protection suits for the police and car parts.
Ministers say Remploy is costing too much: they say each Remploy job involves a £20,000-a-year subsidy from the taxpayer, which they believe is unsustainable. Unions argue the government is not doing enough to bring in business.
The government will make the final decision on how many factories close: earlier this year it narrowly avoided a defeat at the Labour Party annual conference over the issue.
Work and Pensions Secretary Peter Hain announced a moratorium on closures and promised that none would go ahead without ministerial approval.
Common ground
Mr Warner said: "We were able to find common ground with the trade unions on reduction in management costs and overheads, and changes in working practices which will produce additional savings, giving a total of £59 million over five years."
He said he was optimistic that a programme of voluntary redundancies and the promise of more government orders would mean that jobs could be retained.
Remploy unions will announce their own plans to save jobs on Wednesday. Paul Kenny of the GMB union accused the firm's management of reneging on commitments given at the Labour Party conference.
He said managers were "beset by rigidity, completely lacking in vision and only begrudgingly being prepared to tackle the waste of money and excessive overheads that is dragging Remploy into losses".
These are the Remploy factories the company proposes to close: Pinxton; Plymouth; Southend; Treforest; York; Aintree; Brixton; Halifax; Hartlepool; Hillington; Hull; Leatherhead; Lydney; Mansfield; Medway; St Helens; Stockton.
These are the factories Remploy proposes to merge: Barnsley (employees offered option of transferring to Sheffield factory); Birkenhead Central Cutting Unit (to Birkenhead factory); Bradford (to Leeds); Brynnamman (to Neath); Jarrow (to Newcastle); Newcastle under Lyme (to Stoke); Redruth (to Penzance); Southampton B (to Southampton); Stockport (to Oldham); Woolwich (to Barking); Ystradginlais (to Neath).
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