The closure of a Ministry of Defence site near Bicester will have a far-reaching impact on the town's economy, according to business leaders.

Three hundred staff at the Defence Logistics Organisation (DLO) centre in Caversfield were told on Monday the site will close within four years.

The DLO, which supplies clothing to British forces, has used the old RAF Bicester site for 10 years.

Some of the site's 300 jobs will be moved to the DLO's headquarters at Filton Abbey Wood, in Bristol, but although some staff are likely to be lost through natural wastage, the MoD has not ruled out compulsory redundancies.

Les Sibley, a spokesman for the Transport and General Workers' Union, which represents staff at the site: "Obviously it's a worrying time. We will need to have a look at the detail to see what impact this decision will have on the live- lihoods of MoD civil servants."

The decision follows the announcement a year ago of 180 job cuts at the MoD sites in Ambrosden and Arncott.

Mr Sibley added: "If the MoD continues to reduce its workforce, I have grave concerns as to whether or not we will be able to deliver the services our armed forces need to meet their commitments."

David Simpson, the president of Bicester Chamber of Commerce, said: "It's one of the most sig- nificant job losses the town has suffered for quite a while.

"Its effect will go beyond the Caversfield site the loss of almost 300 jobs is devastating and will not easily be replaced.

"Unemployment in Bicester is low, but specialist staff may find it difficult to obtain further employment. These people will not be spending in the town centre and therefore there will be a ripple effect, as the loss will be felt across the economy.

"The site is not likely to have replacement jobs for quite a while, if at all."

Catherine Fulljames, who represents Caversfield on the district and county councils, said: "It's a great disappointment, because there are so many people who live in Caversfield and Bicester and the surrounding villages who work there."

An MoD spokesman said the changes would provide a better service for front line troops.

He said: "The site at Caversfield will be surplus to requirements and we will look at other uses for it."