The Government today confirmed the closure of 27 factories employing disabled workers, saying the loss-making sites could not be subsidised any longer.

Maria Miller, minister for disabled people, told MPs the £320 million budget for disabled employment services could be spent more effectively.

She also announced a further consultation on the future of nine other Remploy factories which have been the subject of bids.

Union sources said the 27 factories will close between August and mid-December.

Workers at Remploy's 54 factories are due to stage two 24-hour strikes in the coming weeks in protest at an announcement by the Government earlier this year of closures.

The GMB union said the strikes would go ahead despite today's announcement.

The minister, who was heckled by opposition MPs during her statement to the Commons, said Remploy workers had been informed of the announcement this afternoon.

"This is difficult news. We are doing everything we can to ensure that Remploy workers will receive a comprehensive package of support and guidance to make the transition from Government-funded sheltered employment to mainstream jobs," said Ms Miller.

The Government announced in March that Remploy was planning to close 36 of its 54 factories, putting more than 1,700 jobs at risk.

The factories were established 66 years ago as part of the creation of the welfare state.

Workers are employed in enterprises that vary from furniture and packaging manufacturing to recycling electrical appliances and operating CCTV systems and control rooms.

The Government said money from the disability employment budget should be reinvested into other schemes to help disabled people find work.

The move follows a review conducted by Liz Sayce, chief executive of Disability Rights UK, into the way in which the Government spends its disability employment budget.

Her report recommended that the Government funding should focus on support for individuals, rather than subsidising factory businesses.

The minister told MPs that the report had made it clear that subsidised employment was not consistent with equality for disabled people.

By spending money more effectively, thousands more disabled people can be helped into work, she said.

The minister said: "Our approach has been led by disabled people's organisations and disabled people themselves, many of whom have welcomed the move to end the pre-war practice of segregated employment."

Phil Davies, national officer of the GMB union, said: "GMB is very angry with the Government's confirmation today that it will close 27 Remploy factories in the first wave by December with the rest to follow shortly afterwards.

"To close these factories that employ disabled people in the present economic climate is a sentence to life of unemployment and poverty.

"The strikes will go ahead on July 19 and 26 as planned and should be a rallying point giving for each local community, the opportunity to stand behind these disabled workers who will be facing the scrapheap."

Kevin Hepworth, Unite's national officer, said: "Remploy workers will be taking strike action to defend their jobs as the axe is wielded by the Government.

"By taking strike action they are trying to avoid their certain destiny of being chucked on the economic scrapheap. They deserve the support of all trade unionists and the public in Britain."

The list of the 36 factories that were announced in March to close were: Aberdare, Aberdeen, Abertillery, Acton, Ashington, Barking, Barrow, Birkenhead, Bolton, Bridgend, Bristol, Chesterfield, Cleator Moor, Croespenmaen, Edinburgh, Gateshead, Leeds, Leicester, Manchester, Merthyr Tydfil, Motherwell, Newcastle, North London, North Staffs, Oldham, Penzance, Pontefract, Poole, Preston, Southampton, Spennymoor, Springburn, Swansea, Wigan, Worksop and Wrexham.

The nine factories to be subject to further consultation are: Aberdeen, Edinburgh, Springburn, Barrow, Bristol, Chesterfield, Poole, Bridgend, Croespenmaen.

Unite accused the Government of showing a "callous disregard" for disabled workers and attacked Work and Pensions Secretary Iain Duncan Smith for not making the statement himself.

National officer Sally Kosky said: "Today's announcement has come totally out of the blue with the Government and Iain Duncan Smith showing a callous disregard for vulnerable disabled workers.

"He's lived up to his own description of being the 'quiet man', by getting a junior minister to try and bury bad news ahead of the Lords reform debate.

"Our members are desperate to work in an environment that takes account of their disability, where they can make a valued contribution to society and pay their way. They do not want to be thrown on the scrapheap and relying on handouts."

A Welsh Government spokesman said: "This statement is a hammer blow for Remploy workers and factories in Wales.

"When the UK Government made their closure announcement we asked them to devolve the Remploy budget and factories to the Welsh Government so that we could create our own sustainable future for this organisation. The Department for Work and Pensions has refused to consider this.

"We will continue to work with Remploy, the unions and other interested parties - of which there are many - to see whether we can find a viable option for the workers. We will strive to find the best solution we can and to save as many jobs as possible."

A Department for Work and Pensions spokesman said: "We have been absolutely clear that the £320 million budget for specialist disability employment services has been protected. But by spending the money more effectively, we can support thousands more disabled people in work.

"That is why we accepted the recommendation from disability expert Liz Sayce, to focus support on individuals through services like Access to Work, rather than institutions like Remploy, so more disabled people can work in mainstream employment rather than segregated factories.

"All disabled Remploy staff affected by the change will be guaranteed a package of tailored support to help with the transition; £8 million is available for this support which includes a personal case worker with one-on-one sessions and access to a personal budget.

"They can also access support from Remploy Employment Services which has found 35,000 jobs for disabled and disadvantaged people since 2010 - many with similar disabilities to those working in Remploy factories."

Mark Lever, Chief Executive of the National Autistic Society, said: "The closure of the Remploy factories will be devastating for those people currently working there and every effort has to be made to help them find new employment. The change in routine will be particularly challenging for people with autism and steps must be taken to ensure that they are adequately equipped to deal with the transition.

"With 2.61 million people already unemployed in the UK and 59% of adults with autism telling us that they don't believe or don't know if they will ever get a job, the Government must ensure that the right support is in place for those with autism. Otherwise they risk depriving many more adults on the spectrum of making the valuable contribution to society that they want and deserve, potentially for the rest of their lives."

Former Secretary of State for Work and Pensions Peter Hain said: "This is a callous, shameless betrayal of thousands of disabled workers who will never work again in areas like Neath where 10 people are chasing every job vacancy. The Government is out of touch and arrogant.

"It is also cynically misrepresenting the truth when it says that the modernisation programme I announced as Secretary of State in December 2007, funded by a £555 million subsidy over five years has 'failed'.

"It was never allowed to succeed by this Government because the plan depended on Remploy factories getting more government and public sector orders. Instead the Government just washed their hands of Remploy."

SNP Work and Pensions spokesman Dr Eilidh Whiteford said: "This is a devastating blow to the employees at Remploy in Wishaw and my thoughts are with all those affected. It is crucial that meaningful, specialist employment advice is available and a fair support package is put in place for those facing redundancy.

"Any efforts to assist disabled people into mainstream work are to be commended, but there is little in the UK Government's plans to show how this will happen in practice."