Primark, the cut-price fashion chain that has transformed Britain's high streets, said yesterday that it had been buying clothes from suppliers who use child labour. Primark said that it was dropping three Indian companies that make thousands of clothes for its stores after discovering they had sub-contracted work out to companies that, in some cases, used children for embroidery work.

George Weston, the chief executive of Associated British Foods, the parent company of Primark, said: “We are appalled, we feel let down and we are taking all the action we can to prevent this happening again.”

The move comes after an investigation by the BBC Panorama team whose findings are due to be broadcast next Monday.

Primark insisted that at no time was it aware that children were being used to finish the products, ranging from

T-shirts to skirts. It added that garments supplied by the companies involved accounted for only 0.04 per cent of the total amount it buys around the world. The items made by the companies, all based in Tamil Nadu, have been removed from the shops.

Primark claimed not to know the age of those children involved but journalists investigating the suppliers are believed to have found some as young as 11 working on the garments.

A spokesman for Primark said: “Work was being given out by unauthorised middlemen and that is enough for us to cease trading with these suppliers.”

Campaign groups rounded on Primark for dropping the suppliers rather than working with them to improve working conditions.

Martin Hearson, the campaign director of Labour behind the Label, said: “Cutting and running from suppliers following exposure by campaigners or the media only serves to punish those workers brave enough to speak out about their conditions. It certainly won't do anything to improve their lives. Such actions make Primark's ethical claims ring hollow.”

Founded in 1969 in Dublin, Primark is now, in volume terms, the second-biggest clothing retailer in Britain after Marks & Spencer, with nearly 170 stores. The popularity of value chains such as Primark and supermarket brands such as George at Asda meant that while the number of clothing items bought between 2001 and 2006 rose by 50 per cent, the amount spent rose by only 25 per cent.

Competition between retailers has put more pressure on buyers to cut costs among the supplier base.

Mr Hearson said: “It wouldn't be fair to say that clothes sold in Primark are made in any worse conditions that any others sold on the high street. However, Primark is driving a change in the industry that is putting ever more pressure on suppliers.”

A spokesman for Primark said: “Primark's prices are low because we don't overcharge our customers. Most of our clothes are bought from the same factories as other fashion retailers and people producing them are paid exactly the same whatever the label and whatever the price in the shop.”

Mr Weston said that Primark will appoint a non-government organisation in southern India to be its “eyes and ears on the ground”.

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