Marks & Spencer's decision to bring high-profile catwalk designers Katherine Hamnett and Betty Jackson on board to design ranges shows just how blurred the line between designer labels and chain-store fashion has become.

Up to 10 years ago that line was very broad and very clear. Designers sold fashion through up-market boutiques and department stores while chain stores simply sold clothes that came with little pretence of being particularly fashionable or even well made. The retail environment has changed to such an extent that M&S is simply following the lead of other chain stores.

Debenhams, traditionally a mid-range, mid-market British chain, has been the most active in its development of big-name designer ranges.

Darlings of the fashion press including Jasper Conran, Pierce Fionda, Edina Ronay, Ben de Lisi as well as Philip Treacy and Orla Kiely. They all currently design own-label clothes and accessories exclusively for Debenhams. Principles has followed that lead and has signed up Amanda Wakely to design her own label range that is exclusive to the store. And at home, A-wear which is part of the Brown Thomas Group, has for the past 10 years had a designer section with John Rocha, Quin & Donnelly, Richard Lewis and more recently young designer, Marc O'Neill, producing collections for the chain.

In the case of M&S the motivation behind the recruitment of such high-profile internationally recognised and respected designers is clear. Sales have been flagging for more than a year and M&S has been accused of being out of touch with what women really want to wear.

What is a little less clear is why the store is so shy about admitting that it has any relationship whatsoever with the sort of fashion designers who regularly appear in Vogue. The news of Katherine Hamnett and Betty Jackson's signings broke in a British newspaper and was supported with an interview with Joe Rowe, M&S's director in charge of clothing buying. However, M&S headquarters has subsequently become tight lipped about the arrangement saying simply that it was "a leak" that shouldn't have happened.

Such media shyness is unusual in the fashion business but not when it comes to M&S which has always been reluctant to admit its relationships with several designers. Tanya Sarne from the very distinctive label Ghost has been an M&S consultant, as has fashion guru Paul Smith. Even young high-fashion designers Matthew Williamson and Julien McDonald have brought their catwalk experience to M&S's rails.

What is unusual about the new recruits, is that for the first time M&S hopes to create a sub-brand specially targeted at fashion-conscious consumers.

"It's a win, win, win situation," says Catherine Condell, fashion stylist, of this development in chain store retailing. "The designer wins because they have the financial support and exposure that comes with a large quality chain store; the consumer wins because she is getting a designer garment for a fraction of the price; and the shop wins because having a well-known designer on a rail gives cachet to the entire store."

Fashion-conscious consumers certainly do win. At Debenhams an evening dress designed by Jasper Conran for his J label, which is exclusive to the store, retails at £180. An evening dress sold under his own label in a designer boutique would cost in the region of £650; an Orla Kiely bag in the same chain store will sell for £35 while her main range sells elsewhere for prices that start at £95.

"The relationship between the designer and the store is very close-knit," says Ms Ann Marie Flood, fashion director at A-wear. "We work with them developing the ranges and as we know exactly what our customers want, we are able to work with them to produce selling ranges."

At A-wear, as with Debenhams and Principles, the benefits to the designer include heavy marketing support. "We do all the brand-building things that you would expect for high-fashion designers," says Ms Flood, "and that includes advertising and PR, fashion shows, special customer evenings and of course major window displays."

When designers first began to work for chain stores the more sniffy end of the fashion press speculated that such a relationship would damage the designers' all-important label appeal, but this has not happened.

"Ralph Lauren has at least eight different labels," says Ms Condell, "from Polo to Ralph Lauren and they cover several price ranges and styles but people don't value one above another, they're simply buying a designer item."

In the late 1980s designers who had established a strong enough brand name responded to consumer resistance to paying big label prices by designing ranges which still bore recognisable versions of their name but were less expensive. This trend, in what is known as diffusion ranges, has grown.

So label queens who can't splash out on the main Donna Karan label can buy the DKNY diffusion range, Dolce & Gabbana fans can flash their D&G labels, and buying the CK brand is the less expensive way of wearing Calvin Klein. Ms Condell sees the 1990s trend of catwalk designers designing for chain stores as being simply another element in the growth of diffusion ranges. And more importantly she sees the notoriously sensitive fashion-buying public's response to such ranges as being the same as their response to any diffusion range.

A-Wear's Ann Marie Flood explained her chain's designer offering as being a marketing mechanism, which sets that chain apart from other Irish chain stores in the mind's of their 18-35 target market.

It's that cachet and store-wide sales spin-offs that M&S is clearly aiming for. Mr Rowe from M&S is quoted as saying that the new designer ranges will not be a "panacea" for the store's difficulties.

"These chain-store clothes are designer labels at a price," says Ms Condell, "they're hugely popular because they appeal to both fashion editors and to sensible people who like designer labels."