The pension regulator has defended its decision over Dawson International, which has gone into administration leaving 200 jobs at risk in the Scottish Borders.
Barrie knitwear in Hawick produces cashmere clothing.
Its parent company, Dawson International, strongly criticised the Pension Protection Fund for rejecting proposals to resolve the company's £129m pension deficit.
Chairman David Bolton said there had been "a flawed process, lacking in common sense and transparency".
The Pension Protection Fund said in a statement:
“On rare occasions, we will - alongside the Pensions Regulator - consider transactions which allow a company to continue to operate with the pension scheme being taken on by the PPF.
We do not enter such arrangements lightly and only agree them if a number of stringent tests are met.
Unfortunately, in this case the offers made to take on the pension scheme, given the size of the deficit in the scheme, were inadequate.
We will be working with the administrators to make sure that the interests of the Dawson pension scheme members are best represented.”
There is optimism that a textile mill in Hawick can be saved, despite its parent company going into administration.
Talks have been continuing throughout the day over the future of one of Hawick's biggest employers.