In an unprecedented move, most of the world's significant mills have signed an open letter to Australian woolgrowers, urging them not to leave the industry.

"We sympathise with those of you who are caught between the PETA-driven demands of certain retailers and the potential death of your sheep and livelihoods," the letter states.

"It appears that either way risks the end of the wool industry.

"We will not allow this to happen. We believe there are solutions."

Emphasising the depth of the concern, 18 Chinese, eight Italian, five German and five Turkish mills have signed the two-page letter, along with French, Indian, Swiss, UK and Bulgarian concerns.

Amongst the signatories is the Associazione Nazionale del Commercio Laniero, encompassing all the Italian wool trading companies, of which there are 34 in total.

The letter calls upon the industry to intensify efforts to breed flystrike-resistant sheep and the use of pain relief with mulesing until such animals can be developed.

"We believe growers should have the right to continue mulesing any sheep that are at high risk of flystrike, on condition that pain relief, as approved by the Australian Veterinary Association and other animal welfare groups, is applied."

The letter was sent to Rural Press this week, via Tony Roberts, director of Modiano Australia, the biggest buyer at Australian auctions last financial year, taking 137,000 bales, or 7pc of all bales sold at auction in 2007-08.

"Without Australia there is no meaningful world wool industry. We must allow common sense and courage to prevail," the letter adds.

Mr Modiano said the names on the letter represented over 75pc of Australia's processor customers.

WoolProducers president Don Hamblin welcomed Mr Modiano's support for growers but added the best way for processors to help secure the future of the industry was to keep prices at a level that was sustainable for both growers and processors.

"We all realise the ultimate customer in this industry is the person buying in retail stores," Mr Hamblin said.

"I can see that Laurence is trying to reassure growers which is good but I'm disappointed he hasn't mentioned clips or intradermals that are being developed as viable alternatives."