The books industry has been left reeling after one of Scotland's award-winning publishers announced its closure.

The organiser of the Edinburgh International Book Festival and a publishing competitor said they were shocked by the news that Mainstream Publishing will shut after 35 years.

The demise of the Edinburgh company, which has published books by Gordon Brown, Duncan Macmillan, Hugh McIlvanney, Sir Ian Botham, Andy Goram and Magnus Magnusson, is a further blow to an industry that is struggling to cope with the rise of digital books and the economic downturn.

Nick Barley, director of the Edinburgh International Book Festival, said: "My friends at Mainstream may be going out on a high, but it's a sad loss to Scottish publishing that this wonderful publisher is to close."

Marion Sinclair, the chief executive of Publishing Scotland, said: "I am really disappointed that we are losing one of the mainstays of publishing in Edinburgh and Scotland.

"After losing the Chambers office in Edinburgh, this is another loss to what is really a small industry, and it's very disappointing."

She said: "They were such a strong brand. When you went to book fairs it seemed to be Canongate and Mainstream that were well known for being based in Edinburgh and Scotland."

Founders Bill Campbell and Peter MacKenzie said they would close Mainstream's Albany Street office in the capital in December, with the loss of 10 jobs.

Ms Sinclair added: "You have to pay tribute to Bill and Pete.They have been great publishers for 35 years, they have been brave and published some really significant titles, but it is a shame we will be losing the company."

The firm, which has been printing non-fiction, history, art, military memoirs, politics and sports books since 1978, yesterday told staff that the company would be shut down.

Mainstream's final book will be published in March 2014 and it is thought that Random House, with which Mainstream entered into a joint venture in 2005, will continue to publish its back catalogue.

In a joint statement Mr Campbell and Mr MacKenzie said: "The past 35 years have been, for the most part, an immense pleasure.

"It's been our privilege to have worked with so many interesting people and talented authors and to have been surrounded by such highly professional and dedicated staff. We're proud of what we've all achieved."

They added: "Our priority now will be to publish our remaining outstanding lists with the flair for which we've become renowned.

"In some, hopefully lengthy, paragraph in the great history of publishing there will be recognition of Mainstream's contribution as a successful, innovative and profitable company.

"We're going out on a high. For Mainstream there should be no other way."

Books published by Mainstream over the years have won, or been nominated for, a series of awards.

These include Duncan Macmillan's key art text, Scottish Art 1460-1990, which won the Saltire Society Best Book of the Year award in 1992; Dark Trade by Donald McRae, which was named the Sports Book of the Year in 1996; and Dreams of Exile by Herald columnist Ian Bell, which won the Saltire Society Best First Book in 1994.

It has also published a number of books by the former Prime Minister Mr Brown, including his selected speeches and his biography of James Maxton, one of the key socialist politicians of the inter-war period.