Exactly 100 years on from the creation of stainless steel cutlery in Sheffield, a group of specialised craftspeople are close to saving the building where that invention was born as a permanent home of manufacturing, safeguarding their skills for future generations.

Sheffield was once synonymous worldwide with steel and cutlery production. But competition from overseas imports stifled trade and since the 1970s thousands of Sheffield workers lost their jobs in the manufacturing industry.

But now one of the biggest community buy-outs in the country should guarantee that the building where stainless steel cutlery was invented can continue to house craftspeople, who plan to teach their inherited skills to young people in Sheffield.

A handful of 'little mesters' – a term that used to be given, particularly in

Sheffield, to highly skilled self-employed craftsmen – pay small rents for specialised workshops in Portland Works, a dilapidated brick building on Randell Street, south of Sheffield city centre.

In 1913 a metallurgist named Harry Brearley took a corrosion resistant steel alloy he had developed to a cutler at Portland Works, and the first ever stainless steel cutlery was born. A hundred years later and, although no longer a cutlery works, the building houses some of the last of the city's little mesters' workshops; its tenants include metalworkers, furniture makers, woodworkers, an engraver, and a knife maker, as well as several independent artists and musicians.

Derek Morton, chairman of the Portland Works project, said: "When I walked in there three years ago and discovered the place it was still doing what it had always done – it was full of small workshops. It's like a time warp, going back 30 or 40 years. It was almost the last of these cutlery works that was still housing manufacturing."

Six years ago plans were set in motion to redevelop the Grade II* building – listed as such for its architectural design and historical significance – which would have put an end to its historic role within the manufacturing industry. A group of people then joined forces and launched a campaign to raise enough money to buy the property outright and preserve it as a place for manufacture.

The campaign launched a community share issue in June 2011. Since then, more than 430 people have bought shares in Portland Works, costing anything from £100 to £20,000. They have raised over £300,000 and, coupled with a loan from the Architecture Heritage Fund (a charity which funds the regeneration of historic derelict buildings), have enough to purchase Portland Works. The deal should be finalised within the next few weeks.

"Our commitment is to keep the rents low or at least realistically low while also restoring the building and making it weatherproof and watertight," said Morton. "It's going to need £1m spent on it."

"The way we see it, the first five years are going to be financially hell," he added, but said that after that they should turn a corner and start generating a surplus. Any profits will eventually go into sponsoring small projects, possibly community or manufacturing projects like Portland Works.

The group also plans to introduce apprenticeship schemes, providing opportunities to allow the current tenants to impart their manufacturing experience, much of which has been passed down from their ancestors. They want to be able to offer some bright youngsters a start-up business, with a small, low rent workshop within the Works. They have started making inroads into local schools and colleges and, although they are not insured for school groups, have hosted several university groups doing design and architecture projects.

The tenants

Pam Hague.

Pam Hague, 64, has been working at Portland Works since 1972. Her father was a cutler and began working in the building in 1968. Though Hague's business is grinding blades for lino-cutting her workshop contains much of the equipment that was used to make cutlery. Hague, her mother and her sister took over her father's business after he died, and the three of them starting making fences for a local public school.

"I just carried it on because my father had been here that long. Mind you, I've probably been here longer than he was now," said Hague. "But even now I think I'm one of the only women engineers in Sheffield."

Also past retirement age is engraver Mick Shaw, 68, who has worked in Portland Works for 30 years and as an engraver since the age of 17. Though most engraving is done by lasers nowadays, Shaw still gets a lot of business. "I don't work as many hours as I used to," he said. "But I probably still work more than most people – about 50 hours a week."

Portland tenant Andy Cole, 50, has worked the 19th century forge at Portland Works for 36 years – he started sweeping floors for a family friend, Wigfull, at 14 years old and was put on the books as soon as he was legally old enough. When he bought out the forge, Wigfull Tools became A Cole Tools.

Cole was one of the last Sheffield businesses still forging builders tools, until imports from China made it impossible for him to continue. "The chisels were coming in cheaper than I could buy the steel," he said. "Because of the recession people wouldn't pay the extra even though I gave them a lifetime guarantee." He now makes woodworking tools – there's still a market for handmade wood chisels, particularly in America.

Paul Hopprich rents the biggest area within Portland Works, and has been making quality cabinetry there for 26 years. "It's a beautiful building when you see beyond the dereliction," he said. "But the more important thing to me is the community spirit." All the different craftsmen at the Works help each other out, so most jobs do not have to be outsourced.

Another tenant Stuart Mitchell, 43, has been making knives since the age of 15. He learnt the skill from his father, who went into a Sheffield factory straight from school and worked in the cutlery industry all his life. Mitchell first remembers exploring his workshop on the second floor of Portland Works when it belonged to his father in 1980. He began working there in 1985.

Stuart Mitchell in his workshop.

"This workshop is the only place I've ever worked," he said. "The customers like it; it's a very historic thing as well." All Mitchell's customers are regulars. He specializes in quality custom knives for outdoor or kitchen use, and says his trade is all about "just making that perfect knife."

"My trade, in my lifetime, I've seen that dwindle away. There are definitely skills and traditions that are still worth keeping alive. I can't think of many people after me that will be able to do it." Mitchell is very keen to take on apprentices, but said it would be difficult to get around today's health and safety regulations.

"We were lucky that the group came together," he said. "And I think Sheffield in general – the people in general, have reached a point where we're so fed up of seeing things like this disappear. I think we were at a point that if we didn't save Portland Works there'd be nothing left to save."