The Scottish economy was in crisis last night after part of the vital Grangemouth chemicals complex was closed down, plunging the future of thousands of workers and the rest of the site into doubt.
After a bitter industrial dispute in recent weeks, owners Ineos announced that it would appoint liquidators at the petrochemicals part of the plant in days, with the loss of 800 jobs.
A further 2,000 workers are thought to be employed by contractors serving the facility, and fears were growing last night that the adjacent oil refinery could soon suffer a similar fate.
First Minister Alex Salmond called an emergency cabinet meeting and said he was “not prepared to accept” that the closure was inevitable, calling for both sides to get back around the negotiating table.
But he added that the Scottish Government would continue to try to find a buyer for the facility if talks failed.
Prime Minister David Cameron has discussed the closure at meetings of the UK Government’s crisis committee Cobra, while an urgent debate was held at Westminster.
Former Chancellor Alistair Darling warned the closure would leave a “huge hole” in the Scottish economy, while former Scottish secretary Michael Moore branded it an “act of industrial vandalism” of the kind not seen for decades.
The Grangemouth oil and petrochemicals plant supplies most of the fuel for Scotland and powers BP’s Kinneil oil terminal, which processes North Sea crude coming ashore via the Forties pipeline system.
Last night BP said: “We will be talking to Ineos about the implications, Kinneil is continuing to operate as normal, and we are making deliveries to our retail sites and airports.”
A spokeswoman for industry body Oil and Gas UK said: “We are concerned by this turn of events and we are considering the implications for the industry.
“The Forties pipeline system has been running normally during the closure of the plant over the past week but clearly we need to consider the full implications of this recent turn of events and this we are doing.”
Ineos said it had made the closure decision after workers were split on a survival plan for the site, which included accepting a pay freeze and changes to pensions and other terms and conditions.
A bitter war of words flared between Ineos and the Unite union, which described the closure as “catastrophic”.
The owners insisted that the refinery would remain open, but added that it had not yet decided whether to restart production after the site was closed last week because of the dispute.
Unite said it had made new proposals last night in a “last-ditch” effort to save the site.
Workers were given the grim news at a meeting with Ineos chairman Calum MacLean.
Mr MacLean said: “This is a hugely sad day for everyone at Grangemouth.
“We have tried our hardest to convince employees of the need for change but unsuccessfully. There was only ever going to be one outcome to this story if nothing changed and we continued to lose money.”
Scottish Secretary Alistair Carmichael said: “This is too essential a site for our economy and capability here in Scotland to let it slip away without exhausting every avenue we can to keep it open.”
Mr Salmond said: “We should give time for the proper consideration of this offer, especially given that we know an agreement between both sides was very close last week, and the prize is a viable future for Grangemouth.
“However, given that the current position is the one we always feared possible given the stalemate between the sides, if an agreement between Ineos and Unite is not possible then we will continue to pursue our contingency options of finding a buyer for the site.”
UK Energy Secretary Ed Davey said:”Fuel supplies continue to be delivered as usual.”