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"The company has the rights to discontinue the business. The government will then step in to ensure that employees receive legal compensations as well as relocating them to new plants. I believe that all 4,400 workers could have new jobs," he said.

He added that the government would not allocate any financial assistance to the company.

Thai Silp had earlier closed its business abruptly last week but decided to reopen the following day after receiving financial backing from the Thai Textile Institute.

It reinstate all of the nearly 5,000-strong workforce it laid off after its sudden closure on Wednesday.

The sudden closure was much publicised as some 200 factory workers protested and blocked traffic outside Samut Prakan City Hall against the closure.

The Industry Ministry has asked the institute to assess the health of the entire textile industry following Thai Silp's closure citing problems caused by the appreciation of the baht.

However the company that made sportswear for foreign markets decided to terminate the business on Friday after banks refused to give more lending.