Sonae said the Knowsley Metropolitan Borough Council’s planning committee decision (14-4 in favour) would not affect continuing consultation over closure plans for the plant.

"It is disappointing that a number of councillors saw fit to reject our proposals, despite a clear recommendation to grant planning permission from council officers," said Nigel Graham, Sonae Industria (UK) Ltd managing director.

"It is also sad and frustrating that the local MP has been campaigning for our closure and publicly calling for objections against this application.

"This has wasted resource on both sides and has been a contributing factor to our group losing its confidence in continuing to operate in Knowsley."

Sonae’s original flaker hall was destroyed in last year’s major fire at the chipboard factory. The company took the decision to rebuild, constructing a smaller flaker hall without planning permission in order to speed up the return to production.

Meanwhile, Sonae has rebuffed a call by MP George Howarth and union UNITE for a health and safety/environmental audit as a potential way to keep the factory open.

The MP, who has campaigned against the factory on behalf of residents who believe the Knowsley factory is an environmental health risk, now suggests an independent expert could carry out a factory audit to assess what it would take to resolve health and safety/environmental "problems".

"Whilst Sonae has always historically co-operated and participated with requests for independent reviews, a further health, safety and environmental review at this time would not address the core issues affecting the viability of the plant," Sonae said.

It said an audit would not provide a solution to the current planning stalemate relating to Sonae’s application for new recycled wood cleaning equipment.

Sonae’s recent launch of a 90-day consultation with Knowsley’s 220 workers over a possible closure of the factory stemmed from a failure to reach agreement over the planning application.

It said the political and planning difficulties had reduced factory capacity, which was "unsustainable" in the challenging economic climate.