The only surviving flax mill on the UK mainland closed its doors for the last time yesterday.
Receivers were called in at the Selbie Mill, in Gourdon, Kincardineshire, when the order book dried up.
The final straw for the mill, which started production almost a century ago, was the cancellation of a major order by Laura Ashley.
The 40 remaining staff left at the plant, which employed over 200 people in its heyday, were yesterday given their final pay cheques.
Mr Maurice Dorrington, of London-based receivers Poppleton and Appleby, said the future for the mill looked bleak.
He said: ''We simply do not have an order book with which to continue and the decision was made to close the mill.
''There is a very slight chance that the mill will reopen sometime in the future but I have to admit it is very slim.
''We are talking to the workforce today about what they can and can't do in the near future.''
Mr Dorrington explained that the decision by Laura Ashley to cancel millions of pounds worth of orders had left the Gourdon mill with an empty order book.
''There is always hope in a situation like this but the order book has just gone out the window,'' he said.
Aberdeenshire councillor Jock McGregor said news of the closure was ''catastrophic'' for such a small village.
''The area has limited job opportunities and when 40 jobs are lost in a village like that, then it is quite significant. They will take quite a while to replace.''
He said the closure of the nearby RAF base at Edzell had enabled the area to qualify for special funding as an area of low employment.
''We already have a planning application for a 13-acre business development site in between Gourdon and Inverbervie. That is currently going through the planning process.
''We can give them new opportunities. We have managed to get the area identified as a 'major redundancy' area which means the workers can be retrained immediately instead of having to wait.''
The Selbie Mill opened in 1902 and was formerly owned by the Sidlaw group of companies. It was latterly owned by London-based company G and F Spinners.
The mill was one of a number of textile factories centred on Gourdon and the neighbouring village of Inverbervie and employed over 200 people.
As well as producing flax, it also produced linen and jute for UK markets.
Its closure means that the only flax mills which remain in operation in the British Isles are on the Isle of Man or Ireland.
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