Donegal Carpets in Killybegs, which has just completed a number of carpets for Áras an Úachtaráin, announced yesterday that it is to close with the loss of 10 jobs.
The manager, Mr Michael McDaid, is attempting a last-minute management buy-out to save the company.
Mr McDaid appealed to the Government yesterday to help save the company from closure. "If we got €200,000 of orders from the Government for embassies and State buildings we could save this company that is a part of our national heritage," he said.
He is also looking for private investors to come on board, saying €500,000 would not only secure the name and looms of the company but would fund a major marketing drive.
The company closed in the 1980s for a period before being revitalised by a FÁS scheme which handed over the business to private enterprise in 1999.
Since then it has had numerous orders for the refurbishment of the Áras through the OPW, with other recent contracts including carpets for the Royal Hospital Kilmainham, the chapel of the University of Notre Dame in the US and a number of private collections in Japan, the UK, the US and Russia.
Catering to the top end of the market, the traditional Donegal carpets range in price from €400 a square metre to €2,500.
"I accept this company doesn't have a right to exist, but it is part of our history, and recent innovations just haven't had enough time to develop," Mr McDaid said.