Sheffield Forgemasters will give Vince Cable an ultimatum on Thursday, warning the business secretary that it is likely to ditch its planned expansion into nuclear power unless the government agrees to help fund the project by early next year.
The ruling coalition triggered a storm when ministers decided in June to axe an £80m loan for the project. But since then, Mr Cable has sent mixed messages, saying he will not review the decision, but will consider giving the company public support.
Forgemasters now appears to have lost patience with the business department, giving ministers a deadline of early 2011 to decide whether or not to back it.
In a statement seen by the Financial Times, Graham Honeyman, chief executive of the engineering group, tells the business secretary: “The company has already invested significant amounts of time, energy and finances into the project and the period into 2011 is now essential for us.”
He adds: “Sheffield Forgemasters needs to be in the best possible position to revisit this proposal early next year.”
The project would see the company buy a 15,000-tonne press to make parts for nuclear power plants. Mr Honeyman has previously estimated that the scheme would allow Forgemasters to double its revenues within four years.
The government has come under pressure to reverse the decision to cancel the loan after it emerged that some of the reasons ministers gave for doing so – such as an unwillingness by directors to sell their shares to raise extra capital – were not true.
More than 10,000 people are now understood to have signed a petition calling on the coalition to change its mind.
Mr Honeyman’s statement thanks the public for an “extraordinary level of backing from across the country”.
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