The UK's last train-making company Bombardier has announced more than 1,400 job losses.
The Derby-based firm had hoped to win a multimillion-pound order for 1,200 new train carriages as part of the £6 billion Thameslink main line rail project.
But the Government decided last month to make German company Siemens the Thameslink preferred bidder, prompting a job-loss announcement affecting 446 permanent staff at Derby and 983 temporary staff.
Bombardier said it was "very disappointed" about the redundancies and said it was "a sad time" for Derby where rail work dates back to 1840 and where 3,000 people work.
One Bombardier worker at Derby said he felt "let down and betrayed", while transport unions said the decision in favour of Siemens was "a scandal" and "misguided".
Labour said it was not too late for the Government to review the Thameslink contract, which will see the new carriages built in Germany rather than at Derby.
But Transport Secretary Philip Hammond said altering the Siemens decision was "not an option" and that Bombardier had informed the Department for Transport in May that it would have to make more than 1,000 redundancies regardless of winning the Thameslink contract.
Mr Hammond added that under European procurement law the Government had had no choice but to announce Siemens as the preferred bidder. He said he and Business Secretary Vince Cable had written to the Prime Minister "on the issue of whether the UK is making the best use of the application of EU procurement rules".
Bombardier had been counting on getting the Thameslink order, having recently lost out to Hitachi of Japan for a big inter-city express train contract.
Workers at Derby are now completing orders for London Underground carriages and for diesel trains for the London Midland main line train company. Most of this work will be completed by the end of September this year.