SCOTLAND'S beleaguered optronics industry has suffered another casualty with the collapse of Dundee's Ferranti Photonics.

The 35-year-old firm, which made high-powered laser systems for the engineering and defence industries, has fallen into liquidation after succumbing to the high value of the pound and a manufacturing downturn.

Ferranti Photonics was originally formed in 1970 as the Laser Group in the Dundee operations of former defence giant Ferranti. A management buy-out led to the formation of Laser Ecosse in 1990 and eight years later, the company moved to premises at Dundee's Claverhouse Industrial Park, where it once employed 25 staff.

Ferranti underwent a restructuring in late-2003 aimed at trimming its costs, but its client base continued to dwindle.

A spokesman for liquidator Deloitte said the firm was finally sunk by the loss of a single bid contract. Thirteen staff were made redundant before the firm began the winding-up process, which was instigated by Ferranti director Gordon Freeman.

"After the cancellation of a major contract the company was unfortunately unable to generate enough turnover to cover its costs, " the Deloitte spokesman added. "Despite an informal arrangement to repay creditors 50p in the pound and a restructuring of the finances with the bank, Ferranti remained under cash-f low pressure in 2004 and the directors were left with no alternative than to put the company into liquidation."

Ferranti's laser systems were used in a range of manufacturing sectors, from sign-making to car airbags to hardwood flooring designs and dieboards for the packaging industry.

The firm joins a lengthening list of failures in what was once a thriving optronics sector north of the border. Other casualties in the last two years or so have included Kymata, Terahertz Photonics and Essient.

However, former Ferranti associate PhotoSynergy, a joint venture formed in 2002 with the University of St Andrews' photonics department, has survived.

PhotoSynergy, which received Scottish Enterprise and SMART award funding, was created to develop laser products which can be used in display, printing, as well as scientific and medical applications.

Managing director Donald Walker said the firm is already marketing a laser product.He said: "Ferranti Photonics supplied us with engineering and services support and we are now looking elsewhere for that."

Peebles, one of a dwindling band of relics of the Victorian engineering industry in the east of Scotland, has been sold out of receivership for an undisclosed sum. It has been bought by Parsons Peebles Generation, a firm owned by Coatbridge-based Patersons of Greenoakhill.

Receiver KPMG said the sale has secured 20 jobs in the Rosyth-based business, which supplies high-voltage electrical motors and generators to the power generation and oil and gas sectors.