In total, 226 redundancy notices will be issued, and staff affected will be encouraged to apply for 100 new positions and 25 production operative roles.

The company, which employs 975 staff at two sites near Cupar, is consulting with representatives from trade union USDAW over the restructuring.

It aims to re-deploy the majority of affected employees to other posts within the company.

Managing director Susie McIntyre said, “It is extremely regrettable that jobs must go, but unfortunately we have to improve efficiency to meet the increasingly competitive demands of the marketplace.

“We experienced a difficult trading period over the last six months in what is a fiercely competitive market and we have no option but to take these steps to safeguard the wider interests of the business.

“We will be working closely with representatives from USDAW to ensure that members of staff have the opportunity to take advantage of the 125 alternative roles which will be made available.”

Kettle Produce Ltd currently grows over 6000 hectares of crops across the UK and continental Europe and in 2003/04 produced 81,000 tonnes of fresh produce including root vegetables, salads and green vegetables.

In addition to its own farms in Fife the company has an extensive supply base with over 80 growers across Scotland.

Kettle has strategic supply partnerships in place with major growers in England, France, Spain and Portugal and in 2003 formed a joint-venture company - KP Espana - in Murcia, Spain.

Commenting on the announcement this afternoon, Mid Scotland and Fife Liberal Democrat MSP Andrew Arbuckle said,"I can’t help connecting this news on the pressure of companies that supply supermarkets and the massive profits announced yesterday by Tesco.

“It really demonstrates the current inequality in the food production chain. This inequality will have to be addressed.”