It might be our national dress but, when it comes to tartan trews and sporrans for the Royal Regiment of Scotland, the products will be labelled "made in England".

The Ministry of Defence (MoD) yesterday announced contracts to make the dress uniforms for the new regiment and, although the 5000 kilts will be produced by a Scottish firm, the two most lucrative orders, totalling £3.1m, will go to companies based south of the border.

Around 5000 horse hair sporrans will be supplied by Ammo and Co Limited, based in Birmingham, in a contract worth £1.4m and the biggest contract, worth £1.7m for 5000 pairs of trews, has been awarded to Leeds-based Turner Virr and Co Limited, which will also make socks, spats and jackets.

Two Scottish firms have, however, secured contracts worth £1.4m. Glenisla Kilts in Motherwell won a £1.2m order to supply the Royal Regiment with around 5000 kilts over four years. The company, which employs 50 staff, will use tartan from Robert Noble Ltd of Peebles.

A further contract, worth around £190,000, for other kilts and accessories has been awarded to Argyll Bagpipes and Kilts in West Dunbartonshire. It will provide kilts for pipers, plus regiments such as the Scots Guards, Royal Scots Dragoon Guards and Royal Irish. They will be manufactured in Alexandria from materials sourced in Scotland.

The new Royal Regiment of Scotland was formed from the amalgamation of the Royal Highland Fusiliers, the Black Watch, the Highlanders, the Argyll and Sutherland Highlanders, the King's Own Scottish Borderers and the Royal Scots.

The regiment's new plaid, known as Government Tartan 1A, has previously been used in kilts worn by the Argyll and Sutherland Highlanders. The kilt contract follows a year-long tendering process that saw kilts made in advance to allow soldiers to test them in different weather conditions, and to finalise their requirements.

Armed Forces Minister Adam Ingram said, under the Ministry of Defence's strict value-for-money procurement policy, all contracts had to go out to open tender with bids invited from throughout the world. There were fears the kilt and accessories contracts could go abroad. "I think the important aspect of this is a large part of the order has gone to Scottish companies against speculation that it wouldn't," said Mr Ingram.

"It has been retained within the UK and a large part of that in Scotland. This is good news for Scottish manufacturing and the Scottish economy, the Royal Regiment of Scotland and the MoD. We are all winners here."

Mr Ingram, when asked directly about the biggest two contracts going to English firms, said : "In terms of the kilt contract, they will be made in Scotland. Only a year ago we were being told the contract to make the kilts would be going to China or Estonia. That has not happened. The Scottish companies have won the contracts against EU competition and that fact should not be diminished. As for the other contracts, they are British companies doing work for the British Army."

John Culbert, managing director of Glenisla Kilts, said: "We're not a big company but we fought hard for this contract and credit is due to every single member of our dedicated staff."