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The move will affect around 300 staff across the FirstPlus, Fair & Square and Secured Barclayloan brands, although 130 staff will be retained at the Cardiff offices to manage the accounts of existing customers.

Neil Radley, managing director of Firstplus (who had previously outlined a commitment to a multi-brand strategy), said the business had tried numerous ways to carve out a way forward but the market conditions are too tough at the moment.

He explained: "In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough.

"We recognise this is a difficult time for our people and will be providing all those affected with support and assistance."

Firstplus was formed in 1997 and acquired by the Woolwich in 1998. It became part of Barclaycard in 2004 following the purchase of the Woolwich in 2000 by the Barclays Group. Based in Cardiff, Firstplus employs approximately 430 people.

Barney Drake, director of Cardiff-based master broker Y3S, said the announcement was a real blow.

"FirstPlus is a great company. They have some distinct selling points in the marketplace and this is a great loss. There is going to be a landslide of business now towards Paragon. What is going to be on everyone’s mind is how Paragon is going to react to this."

Today's announcement has no impact on the current loans of FirstPlus' 128,000 customers.

Barclays said that "every effort" is being made to find staff alternative roles across the Barclays businesses.