The Government's economic belt tightening has had its first direct impact on the manufacturing industry with the cancellation of an £80 million loan to Sheffield Forgemasters.
The loan had been offered to help with the installation of a 15,000 tonne press to make the company one of only two in the world capable of making large forgings for the growing nuclear energy industry.
(More information on the original loan can be found in the news archive here.
Graham Honeyman, chief executive of Sheffield Forgemasters, said: "Today's government announcement to overturn the loan offered to Sheffield Forgemasters' plans to install a 15,000 tonne press is a huge disappointment to all at the company.
"While the press would have placed the company at the forefront of civil nuclear manufacture, it is important for us now to focus on other elements of the company's development. Sheffield Forgemasters will continue to develop its significant involvement in the civil nuclear, thermal and hydro power generation markets, and seek other ways to develop the business."
The government had been petitioned by union leaders not to cancel the loan, citing the potential lost opportunity for the UK to become a key manufacturer and supplier to the growing worldwide nuclear industry.
Sheffield Central Labour MP Paul Blomfield said: "Scrapping the loan to Forgemasters is a kick in the teeth, not just for Sheffield but for the whole of British manufacturing."
While Chris Huhne, the Energy Secretary commented: "I don't see any reason why it shouldn't be able to be financed from financial markets, as it seemed a very strong commercial deal."