It is as closely associated with Switzerland as the Matterhorn, muesli and the cuckoo clock. But the Swiss army knife, considered by millions around the world to be an indispensable tool, is in danger of losing its Swiss identity.

The Swiss army, which is to order a fresh batch of 65,000 of the pocket knives with new specifications, has caused nationwide consternation by declaring that under World Trade Organisation rules, the tendering process must be opened to companies worldwide because of the high value of the contract.

China, which has been producing pirate copies of the knife for years, is thought to have the best chance of winning the contract, which is estimated at 1.7m Swiss francs (£695,000), followed by Taiwan and Bulgaria.

The issue has become one of the hottest political topics of the summer, with far-right politicians saying that national pride is at stake.

"If the Swiss army knife no longer comes from Switzerland, then we might as well stop producing it altogether," said Thomas Fuchs, MP for the far-right Swiss People's party.

Alois Kessler, a lawyer and a former colonel in the Swiss army, has taken up the campaign and launched a nationwide petition, Keep Soldiers' Pocket Knives Swiss!

He said he had found that under WTO rules "stabbing weapons" - among them the Swiss army knife - are on a list of products that do not need to be put out to tender.

"I simply cannot imagine our soldiers carrying a Made in China knife in their knapsacks," he said.

"It would be like us giving them German-made chocolate."

The army is saying little, except that it is working on the technical specifications for the new product to make it suitable for modern soldiering, including a serrated blade with a locking mechanism, a saw, and a Phillips - crosshead - screwdriver. It should also have a case, allowing it to be attached to a belt.

Victorinox, the company that makes the knives, said it was confident it would win the bid on the combined factors of quality and cost.

The knife, which was first produced in Ibach in the canton of Schwyz in 1897, can be equipped with anything from a nail file and a tin opener to a fish-scaler and a USB stick, and features in the design collection of the Museum of Modern Art in New York.

It is credited by everyone from balloonists and astronauts to surgeons and pilots with saving lives and is the official pocket knife for 16 armies around the world, including the US military.

It has also prompted many jokes, perceived as it is as the weapon of choice for the military of neutral Switzerland. The US comedian Robin Williams once quipped: "How can you trust an army that has a wine opener on its knife?"