The owner of the Grangemouth oil refinery in Scotland says it wants to restart production at the facility, but it is calling in liquidators to the petrochemicals business that it shares its site with.

Last week the company, Ineos, shut down the plant and employees were given until Monday to accept a pay freeze and downgrading of their pensions but this was rejected.

Employees were told of the decision to call in the liquidators this morning.

The firm said a decision on whether to restart production at the oil refinery will depend on the removal of the threat of further industrial action.

Responding to the announcement, the Energy Secretary Ed Davey said: “While respecting Ineos’ right to make this decision, it is regrettable that both parties have not managed to negotiate a fair and equitable settlement that delivers a viable business model for the plant.

“Even at this late stage, I urge Ineos to continue dialogue with the workforce, and government will offer help and support with this.

“Ineos have informed us that the refinery will stay open and the management wish to restart full operations as soon as possible. We stand ready to help with discussions between the management and the union to ensure this can happen.”

Davey said fuel supplies continued to be delivered as usual and there was no current risk of disruption to supplies.

PRA chairman Brian Madderson said: “While the news that Ineos is to close the petrochemical plant at Grangemouth is a bitter blow for jobs and the local economy, it is understood that the refinery will continue. The PRA is hopeful that an accord will be reached to ensure the refinery re-commences operation very shortly."

Pat Rafferty, Unite Scottish secretary said: “Unite and our members at Grangemouth are devastated by the announcement this morning of the closure of the petrochemical plant.  It has confirmed our fears that this was the intention of Ineos all along. 

“Discussions have taken place with the company this morning and will continue over the course of the day. We have made further proposals in a last-ditch effort to stave off these catastrophic job losses which we believe are tantamount to economic and industrial vandalism.   

“Make no mistake, one man is holding this workforce and this country to ransom and that man is Ineos owner Jim Ratcliffe. 

“The ball is now in the court of Jim Ratcliffe and the respective governments in Edinburgh and Westminster and we await their responses.”