The company said today the number of staff will be “significantly reduced”.

An administrator is appointed to help rescue an insolvent company and allow it to continue trading. If administration fails then the company goes into receivership.

Texol Solutions managing director Brian Frame told the Tele the firm had made a profit last year, but projected orders for 2008 had not occurred.

He said, “It has become apparent over the last few weeks the anticipated business/orders from a major global customer will not materialise in the near future.

“As a result, it is with deep regret the board of directors has been left with no alternative but to request our bankers to appoint an administrator to protect the best interests of the stakeholders. The board believes the remainder of the business represents a viable concern.

“Intense negotiations continue to identify potential interested parties, but it appears inevitable the number of employees will be significantly reduced.

“The last year (2007) had been profitable for the company, and 2008 would also have seen reasonable returns, with turnover anticipated to remain at a constant level, and an extended and improved banking facility in place.

“However, with the sudden and unexpected loss of revenue from this key global customer, the board felt ongoing normal trading was impossible.”

Dundee West MSP Joe FitzPatrick said, “My first thoughts are for the staff.”

Mr FitzPatrick has written to Enterprise Minister Jim Mather drawing his attention to the situation and has tabled a Parliamentary Question on the subject at Holyrood.

He said, “It is vital the PACE team become involved as early as appropriate. They have had considerable success in finding employment opportunities for workers facing redundancy. The majority of NCR workers have found alternative employment.”

Dundee West MP Jim McGovern said, “I sympathise with the workers at Texol. I am meeting Brian Frame tomorrow to discuss any measures we can take to minimise job losses.”

He added he and Dundee City Council administration leader Kevin Keenan were in discussions with another firm about its possible relocation to the city.

Stewart Hosie, Dundee East MP, added, “It is extremely disappointing, particularly as this is an employee-owned firm.

“It is clear the company is working in the interests of the stakeholders. I very much hope there is still the possibility of a viable business however this will be on a smaller scale than the current Texol operation.

“It is another blow to Dundee and I’ve spoken again to Stephen Timms, the Business Minister, to advise him of the urgency of a meeting to consider the loss of manufacturing jobs in the city.”

Texol was formed in 1998 after management and employees bought part of NCR’s parts making department, where Mr Frame had worked as an engineer. The firm offers a range of services, including metal fabrication, mechanical assembly, box build and design services.

When NCR cut jobs in Dundee and moved the bulk of its manufacturing operations to Hungary, Texol reported an increase in business from the cash-machine makers.

However, it now appears orders from NCR have dropped, putting the entire company at risk. It is believed NCR currently provides Texol with around half of its business.

It is now just over a year since NCR cut 650 jobs in Dundee and more than 1600 jobs — 1000 of them in the manufacturing sector — have been lost in the city over the past year.

A spokeswoman for NCR said, “NCR continues to work with a number of suppliers in the Dundee area and worldwide. We evaluate our requirements continually in line with our needs.”