The owners of the Grangemouth petrochemical plant dropped a bombshell on its stunned workforce this morning when it announced it would permanently end production at the site.
Ineos broke the news at a mass meeting after talks with unions collapsed last week.
The company refused to confirm if the adjacent oil refinery, which is co-owned by PetroChina, will restart production.
Unite the union, which represents half of the workforce at Grangemouth, said it was in talks with Ineos regarding a last-ditch plan to save the plant and avoid job losses.
The Scottish Government will hold an emergency cabinet meeting this afternoon to discuss the shock news, while Falkirk Council will hold a special meeting tomorrow morning.
Around 700 people are employed in the petrochemical business, with a total of 1370 employed across the two sites.
The closure could have a severe impact on dozens of other businesses in the Falkirk district that support the Ineos site.
In a statement, Calum MacLean, Grangemouth petrochemicals chairman, 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.”
As a result of the decision, the directors of the petrochemicals business have engaged a liquidator. It is anticipated that a liquidation process will commence in a week.
Ineos will now decide on whether to restart the refinery. Ineos claims this will be “primarily dependent on the removal of the threat of further industrial action.”
Politicians and trade unions reacted with outrage to the news.
Pat Rafferty, Unite Scottish secretary, said: “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.”
First Minister Alex Salmond said: “This announcement by Ineos is hugely disappointing. It is, however, the position we always feared as it became apparent that the stalemate was not going to be broken.
“I will be speaking again to management and unions today to try and seek any further resolution we can.
“In preparing for this this extremely difficult position we have been pursuing the contingency of potential buyers – we will now be actively exploring this as the main option as a matter of urgency.”
Shadow Scottish secretary Margaret Curran MP described Ineos’ treatment of Grangemouth staff as “terrible” and said that Labour would “demand answers.”
Grahame Smith, Scottish Trades Union Congress general secretary, said that the behaviour of Ineos was “disgusting” and called for ministers to consider nationalising the plant.
He added: “This reveals the true nature of a feral private equity concern that clearly believes it has no social obligations whatsoever.
“In anticipation of this eventuality, the STUC has been in discussion with Scottish ministers and the Secretary of State for Scotland over the past few days. If Ineos is not willing to invest in this plant alternatives must be quickly found.
“As many have noted, the Grangemouth complex is too important to the Scottish economy to be closed.
“When the stability of the economy was threatened by the failure of RBS and HBOS, the government was quick to act. Now when the stability of the Scottish economy is threatened by the industrial blackmail of Ineos, the government must again find the will to act.”