FORTY jobs at a Rossendale weaving firm could be axed after the company recorded losses of £3.5million in the last five years.

Plans for a major shake-up at JH Birtwistle in Haslingden were announced after staff at the company, part of the John Lewis Partnership, were told the restructuring was needed to secure the company's future.

The move could see around a third of the entire 130 workforce axed at the Grane Road mill.

A spokesman for John Lewis said Birtwistle's future had been in some doubt because it has lost £3.5million in the last five years and needed to be restructured in order to stay financially viable.

He said a final decision on the future structure will be made next month.

A consultation process is now under way with the branch's elected council and is expected to last one week.

The company produces base fabrics for both furnishings and industrial use.

It said the general market for printed fabrics had changed greatly over recent years and blamed cheaper competition coming from the Far East and Eastern Europe.

It also said the relative weakness of the UK retail sector since the beginning of 2005 had put further pressure on the business.

John Lewis commercial director Brendan Sweeney said: "In making this announcement, we are of course conscious that it will come as a disappointment to 40 of our partners who will be directly affected by the proposed redundancies.

"We have tried to minimize the impact on partners consistent with our aim of ensuring the future health of the business and the jobs of all those who remain.

"The latest indications are that the market has stabilised and we believe that the actions outlined to partners are essential to return us to profitability.

"As always, the partnership will be providing all the support it can to those who are leaving so that any career change is quickly and satisfactorily achieved."

Established in 1892, J H Birtwistle & Co Ltd was bought by a consortium headed by Frederick Tattersall and the mill remained in the family for nearly 100 years.

In 1988, the company was acquired by the John Lewis Partnership.