The world-famous Hunters of Brora woollen mill has closed after more than 100 years of trading and despite the investment of almost (pounds) 8m of public money in recent years.

The firm, which is renowned for its upmarket tweeds and fabrics, has many wealthy customers, including the Prince of Wales.

Although the company traditionally manufactured tweed using wool from the Highlands and Islands, especially Shetland, the opening of a new plant in 1999 allowed it to diversify into blending wools with other natural fibres such as silk, mohair and linen.

Attempts to move away from its woollen mill image and develop a new look with new materials did not succeed. The level of indebtedness is still to be established, but the 26 workers who lost their jobs said the closure was not unexpected.

The liquidation petition was presented in the Court of Session yesterday.

Valerie Walker, managing director, said: ''We have tried every avenue to make this company work, but the uncertainty in the worldwide market has meant that with no orders in the foreseeable future the only option is to cease to trade.''

She and her estranged husband Craig Walker had been running the Riverford mill at Stewarton in Ayrshire when they took over Hunters in August 2000, after it had gone into receivership in April of that year.

The mill had operated in Brora under the Hunters name since 1901. The Walkers kept the name, but it was owned by a company they had created called Pacific Shelf 948. They were joined by Geoffrey Minter, owner of the Sandside Estate near Dounreay who became chairman. In November 2001, Mr Walker fractured his skull after falling from a car. Since then, he has played no active part in the company.

Highlands and Islands Enterprise defended the public investment in Hunters, stressing the building would not be lost.

A spokesman said: ''In June 2000, Pacific Shelf (948) was the only business offering to create jobs in Brora, in an indigenous industry. HIE and Caithness and Sutherland Enterprise awarded the business a total of (pounds) 230,000, which was made up of loan and equity. This helped sustain 26 jobs.

''The building is an entirely separate matter. It was built with funding of (pounds) 5.3m from HIE and (pounds) 2.02m from the European Regional Development Fund. It remains in public ownership.''