ONE of Scotland's leading designers has spoken of her anger after her contract with the Bank of Scotland was cancelled following its merger with the Halifax and given instead to an English company.

Betty Davies, who designed the bank's famous tartan uniform, said the decision meant the loss of at least (pounds) 2m a year to Scottish contractors and led to the closure of one company.

After a six-year relationship during which Ms Davies said she maintained and updated uniforms for thousands of staff, her Edinburgh-based firm was replaced by Dewhirsts of Driffield.

She had believed the contract was secure because of the bank's high level of satisfaction over her work. The cancellation led to the loss of 15 of her 25-strong staff dedicated to bank contracts.

It led to the closure of one Glasgow supplier, Stewart Morrison's, which had a (pounds) 500,000-a-year contract to supply around 500 garments a week for the bank.

While continuing to attract high-profile large contracts, such as rebranding the Scottish Ambulance Service and Coutts Bank, the Betty Davies Company was still forced to move to new premises.

Ms Davies said: ''We always had a good working relationship with the bank.

''It was extremely disappointing to lose such an important contract to a large company which dominates the market and which one fears will continue to do so.

''It wouldn't have cost them any more to stay with us and it might have cost them less Offices of procurement should seek and use the talents that are up here in Scotland. There is a tremendous amount of talent here and it should be utilised.''

Liz Ramsay, managing director of Caledonia Textiles in Glasgow, previously worked as manager with Stewart Morrison. She said: ''We were able to rebuild the company (Caledonia) from the ashes by going into Highland wear, but we still lost 10 workers.

''It is pathetic what the bank has done to Scottish industry. We had the contract for years and they screwed us to the wall.''

The news was also met with anger by the SNP last night, with Jim Mather, enterprise spokesman, criticising the decision to place the contract with Dewhirsts, which is based 75 miles from Halifax in Yorkshire.

He said: ''Obviously people are out there competing in the marketplace but we want these companies with Scottish headquarters placing as much of their business locally as possible because that builds the strength of the local economy in the long term.''

The SNP has already targeted the bank earlier this week over its decision to replace the tartan uniform with a design by the English company which HBOS described as having a strong tartan influence. One source close to the bank said: ''The strong feeling with the uniforms was that it was out of the control of the bank in Scotland and that the decision was made by a procurement department in England.''

The bank yesterday described its headquarters at The Mound in Edinburgh as its decision-making centre, and insisted that part of the new uniform would be sourced in Scotland. It also claimed to have created 3000 new jobs in Scotland since the merger, at branches, corporate and business banking centres in Edinburgh, and at Intelligent Finance offices across the Central belt.

Mark Elliott, HBOS spokes-man, said: ''We have enormous numbers of contracts and jobs that are placed day in day out to companies based here in Scotland and if you add up the spending of that it generates millions of pounds every day into the Scottish economy.''

Life of Fashion

Name: Betty Davies

Company: The Betty Davies Company, Moray Place, Edinburgh, Founded in 1992.

Graduated from London Guildhall School of Music and Drama and the London College of Music in 1963.

Held fashion shows at the Royal Scottish Academy, and in Paris and London.

In 1992, designed ceremonial robes for lord provost of Edinburgh; commissioned by the kirk session to design new choir robes for St Giles' Cathedral, the High Kirk of Edinburgh.

In 1992/93, produced the definitive designs for the entire academic dress for the new Napier University.

In 1993 commissioned by the lord lyon king of arms to design and execute the uniform for the first female Officer of Arms.

Designed uniforms at the National Museums of Scotland, Scottish War Museum and new Countryside Museum at Kittochside.

Her company clothes all staff at the Edinburgh International Conference Centre, Dynamic Earth, and Conran's Ocean Terminal.