The exquisite pinks, blues, greens and greys that glow like ancient auras off the sand, sea and machair of the beautiful islands of Lewis and Harris have been the inspiration of Hebridean weavers for centuries. They have dyed, spun and handwoven pure wool to make world-famous Harris Tweed for almost two centuries. In the industry's heyday, crofters produced more than seven million yards of tweed a year, all delivered to the famous finishing mills, which would stamp the tweeds with the famous Orb before shipping out to a market hungry for a unique piece of Scotland.

But today the biggest mill at Stornoway, the former Kenneth Mackenzie Mill, which once produced 95% of all Harris Tweed, finally ceases production. The Harris Tweed Company's Yorkshire-based owner, Brian Haggas, will serve redundancy notices on the 13 members of staff who remain - down from 85 when he purchased the mill in December 2006. Their redundancy means that 120 weavers now also face an uncertain future.

It's the end of an era. But is it also the end of the Harris Tweed industry?

Brian Haggas, who dramatically reduced production at the mill by concentrating on men's jackets in only four styles in a small choice of patterns, and instead invested million of pounds of his own money in buying modern equipment, yesterday insisted that he will be back - despite finding himself with a stockpile of 70,000 unsold jackets.

"I have faith in Harris Tweed and I have faith that I shall succeed," he told The Herald. "It's just going to take a bit longer than expected."

He blamed external forces, including a "30-year lack of industry marketing" and the current world recession for disappointingly slow sales for his jackets, which he launched in the UK, US, Canada, and Europe in September last year. "The reception of our jackets has been fantastic, but we are not selling them even at hugely discounted prices. So we're not making any more tweed.

"I entered the market last September and I couldn't have picked a worse time. It's a tragedy, really, but we've got to face up to it. We now have to conserve our cash, increase sales and stop production. Ask any car manufacturer; it's the same story." He does not believe that his business strategy has been at fault. "Men's jackets represent 90% of the market for Harris Tweed," he insisted. "Why would we diversify? We will eventually succeed."

But former Department of Trade and Industry minister Brian Wilson, chair of Harris Tweed Hebrides based at Shawbost on Lewis, thinks otherwise. Production at Shawbost, which re-opened in 2007 after being idle for a year, is increasing weekly and it now claims to supply 90% of all Harris Tweed, or the equivalent of what Mr Haggas's mill could have done. This is owing to a strategy of pursuing the high-profile fashion market. Alexander McQueen, Calvin Klein and Paul Smith all showed designs in HTH-produced tweed at their recent autumn/winter 2009 Milan fashion shows. Vivienne Westwood and Gucci have also bought tweed for future collections.

"The British textile industry is a difficult industry, but Harris Tweed has something special to sell," he said. "The key to it is the weavers, and we have to find a way of retaining them with enough work. The danger is that they will now drift away to other jobs."

A Weavers' Fund of £300,000 was set up by Highland Council to help out the weavers during seasonal slumps, and it is hoped the Scottish Government and Highland and Islands Enterprise might eventually match that amount.

Alan Bain, the Scots-American director of Harris Tweed Textiles, whose mill is at Carloway, said he is saddened at the news from Stornoway because it has an impact on the industry as a whole. "We wanted Brian Haggas to succeed because that meant we'd all succeed," he said. But HTT is forging ahead and hopes to increase production this year to 100,000 metres. The company has secured the services of Edinburgh-based designer Betty Davies as a consultant on new designs for 2009 and on Friday evening HTT will showcase a Harris Tweed wedding dress designed by Lewis-based Ann McCallum of Hebridean Dreams and worn by singer Alyth McCormack last month.

Ironically, the wedding dress will be on display at Friday's "Celebration of Harris Tweed" event which takes place at An Lanntair, Stornoway, on Friday evening and is being promoted by the Harris Tweed Authority. The event will also see the UK launch of the 09 collection of Scottish Designer of the Year Deryck Walker, whose tweed is from HTH.

Donald John Mackay, a weaver in Luskentyre on Harris who supplied Nike with tweed for an exclusive range of trainers, as well as supplying a sample for a range of Nike Converse boots, last month secured a deal with Clarks and is hopeful that he will be asked for more.

Mackay is busy, but he worries that today's news from Stornoway will affect the international market. "We are worried people will think the whole industry is closing down," he said. "That's completely wrong." He, too, believes that what's required now is a worldwide marketing campaign.

Lorna Macaulay, chief executive of the Harris Tweed Authority, said increased marketing support will be given to the two remaining mills at Shawbost and Carloway. "They have both been proactive in getting their product out there and as a result their phones have been hot from people looking for their cloth," she said. I agree we need to improve our promotion of the brand."

"The Orb is unique and makes Harris Tweed an iconic brand that has great worldwide prestige," she said.

The highs and lows of Harris Tweed fashion From island mills to some of the world's most famous boutiques, Harris Tweed has come a long way in fashion terms.

The fabric first hit the fashion headlines in 1987 when avant-garde British designer Vivienne Westwood unveiled her Harris Tweed collection in London.

A departure from her previous punk style, the refinement and tailoring in this collection instantly put Harris Tweed on the style map. The collection was inspired by the Queen in her teenage years, although Westwood has also used the fabric in many of her other collections.

While Westwood was keen to use Harris Tweed in her womenswear collections, many other designers prefer to use the fabric in their gents clothing instead. Ralph Lauren is famed for using Harris Tweed in his designs, often cutting the fabric into jackets, suits and overcoats. Similarly, Calvin Klein's most recent menswear collection included some beautiful Harris Tweed overcoats - a far cry from the label's traditionally stark and minimalist style.

Scottish designer Deryck Walker has also been working with Harris Tweed recently, using it for his fashion show at the 100% Tokyo Design exhibition last year. He also took his Harris Tweed collection to Paris in January.

Of course, not every foray into the world of design has been successful. Those famous Harris Tweed Nike trainers seemed like a good idea in 2004, but the design never really took off with sporty consumers.

By Elizabeth McMeekin