One of the world's leading publishers, Penguin, is closing its office in Scotland.

For the past four years, Judy Moir, a leading literary editor and former publisher at Canongate books, has found and nurtured writers north of the border for the London-based publisher.

However, Ms Moir is now to leave her post of Scottish editor at Penguin at the end of January after the publisher said it has changed its business model. Last night, she said she was "baffled" by the company's decision and that she still had great faith in the writing talent north of the border.

Ms Moir was appointed as Scottish editor four years ago, and another leading London-based publisher, Hodder Headline, mirrored that decision, appointing Bob McDevitt, the former manager of Ottakar's bookshops in Scotland, as its publisher for Hodder Headline Scotland, responsible for identifying a number of fiction and non- fiction writers in Scotland.

Ms Moir currently has 15 writers on her books for Penguin in Scotland and last night she admitted the removal of her post would be "difficult" for them.

"They are closing the Scottish office after four years," she said last night, "and I am still a little bit baffled. My remit was to find Penguin Scottish writers and ideas and feed them back to Penguin, and of course I am disappointed it has come to an end.

"I still feel enormously positive about the future of Scottish writing. I have been involved in Scottish publishing for more than 20 years and I have a great relationship with the writers I work with.

"Why they would want to do this in Scotland, I don't know. Last year was a really rewarding year, so from my own point of view I know I did a good job for them."

In her time in Scotland for Penguin, Ms Moir has helped publish James Robertson's The Testament of Gideon Mack, which was shortlisted for the Commonwealth Prize, two Scottish awards - the Saltire and Scottish Arts Council awards - longlisted for the Booker Prize, as well as being selected for the Richard and Judy Bookclub in 2006.

She also worked on the critically successful Scotland: The Autobiography by Rosemary Goring, the literary editor of The Herald.

Last night, a spokeswoman for Penguin said they still had great faith in Scottish writing, and would be commissioning Scottish writers from London.

The spokeswoman said it "made more business sense" to revert to the London-based model and added that new books by Scottish writers James Robertson, James Kelman and Ali Smith had already been commissioned.

Tom Weldon, managing director of Penguin General Books, said: "Judy has a terrific editorial eye and an unrivalled network of contacts in Scotland. We are very grateful to her for bringing some wonderful new Scottish writers to Penguin's publishing lists over the last four years."