Three of the last remaining Remploy factories are to close, threatening 160 disabled workers with redundancy, the company has announced.
Remploy said no viable bids had been made for its furniture business, so it will close sites in Blackburn, Neath and Sheffield.
All 196 employees, including the 160 disabled workers, are at risk of compulsory redundancy, although they will be invited to consultation meetings over the next 30 days.
The company added that a potentially viable bid had been made for its automotive factories in Birmingham, Coventry and Derby.
Detailed negotiations will now be held to complete a transaction as soon as possible.
Remploy factories were established 66 years ago as part of the creation of the welfare state, employing disabled workers in a series of different enterprises ranging from furniture and packaging manufacturing to recycling electrical appliances and operating CCTV systems and control rooms.
The Government said last year it would reduce its subsidy to Remploy, following an independent review conducted by Liz Sayce, chief executive of Disability Rights UK, which recommended that government funding should focus on support for individuals, rather than subsidising factory businesses.
At the time of the announcement in March 2012 there were 54 Remploy factories, as well as the company's recruitment arm, employing a total of 3,600 workers.
Around 1,700 factory jobs have since been lost, and by the end of the year there will be no Remploy factories left because of closures and sales.
Remploy pointed out that the Government has put in place a comprehensive package of support to help disabled workers losing their jobs, including a personal case worker.
TUC general secretary Frances O'Grady said: "The imminent closure of the Remploy factories in Blackburn, Neath and Sheffield means that another 160 disabled workers will lose their jobs, with potentially devastating consequences for themselves and their families.
"There are already far more jobseekers than vacancies in these areas so their chances of finding new jobs are slim, particularly as many employers remain reluctant to hire severely disabled people.
"The Government's withdrawal of support for Remploy factories continues to put hundreds of disabled people out of work and gives the lie to ministers' claims about supporting disabled people."
Jerry Nelson, national officer of the GMB union, said: "These job losses are the latest in a long line of disgraceful, ideologically driven decisions by this Government.
"There is an alternative. These workers could be put back to work making uniforms for our troops, police and nurses and furniture for our schools like they did before the work was outsourced to China.
"Sheltered workshops are allowed under EU procurement rules and can successfully keep disabled workers gainfully employed if supported by public contracts."
A Department for Work and Pensions spokesman said: "Remploy and independent experts worked extensively with several bidders on their best and final offers, and despite this, unfortunately there are no viable final bids for the furniture businesses in Blackburn, Sheffield and Neath.
"Our priority throughout this process has been to safeguard jobs for disabled people, which is why we offered a wage subsidy of up to £6,400 per disabled employee to encourage interested parties to come forward.
"All disabled employees at the three factories affected will now be guaranteed tailored support from an £8 million package, including a personal case worker, to help with the transition to mainstream employment."
Unite general secretary, Len McCluskey, said: "Iain Duncan Smith (Work and Pensions Secretary) and the company need to stop hiding behind a veil of secrecy and explain why in this final act of callousness no bids were deemed viable.
"The workforce has been kept in the dark and face a future of fear and insecurity as this cruel Government consigns them to a life on the dole.
"Remploy has provided employment and dignity in a safe and secure environment for thousands of disabled people. The closure of all Remploy factories by the end of year is a shameful act, by a shameful government."