The Minister for Agriculture has written to Greencore making it clear that the company must accept its plans for how compensation for the end of sugar processing is to be spent before the money is paid out.
Ms Coughlan wrote to the Greencore chief executive David Dilger yesterday "setting out clearly the requirements for the restructuring plan", a spokesman for the Minister said yesterday.
The letter is understood to have repeated the Government's determination that the €98 million compensation being given to the company be earmarked for its pension scheme, clearing the sites of the old sugar processing factories and funding a redundancy scheme.
Sources have suggested that the company might accept the €98 million on offer - which is significantly less than it believes it is entitled to - if it was given more leeway on how the money might be spent.
By dictating where the money should go, the Minister proposes to prevent Greencore from choosing to use the money in other ways that might be more attractive to its shareholders, such as reducing debt.
A spokeswoman for Greencore said last night that despite the letter, nothing had changed. The company was still considering its options, including the possibility of legal action. "The company will still do what is right by its shareholders," the spokeswoman said.
Greencore has until July 31st to submit to the Government its plans for how the EU money, compensating for the ending of sugar growing and processing in Ireland, is to be spent.
However, the Government is making it clear that it will only accept and submit to Brussels a plan that accords with its own proposals, announced earlier this week.
If the EU then approves the Government plan, the compensation will begin to be paid next year.
The apparent stand-off between the Government and Greencore arises from this week's Government proposal to allocate some €47 million of a €145 million compensation fund to beet growers and contractors.
The company says this fund is intended for sugar-producing firms. Two other schemes, worth a total of €167 million, are earmarked for growers and contractors, the company says.
Greencore is to get €98 million from the €145 million available but the Government has specified that some €50 million of this must go to the company's pension scheme, €20 million to clearing up the old sugar factory sites and the remaining €18 million to a redundancy package for Greencore workers.
Greencore says the allocation of €47 million of the restructuring aid to farmers and contractors is excessive, and that they should get only 10 per cent, or €14.5 million.
The Labour Party leader Pat Rabbitte yesterday accused the Government of failing to use powers he says it has to protect the assets of Greencore, including its sugar quota and its factories at Mallow and Carlow.
On a visit to south Tipperary yesterday, Mr Rabbitte said that the proposed compensation package for Ireland's exit from the sugar processing industry was "extraordinarily generous" to Greencore, which was Ireland's monopoly sugar producer for the past 15 years.
Mr Rabbitte insisted yesterday that the legislation privatising Greencore in 1991 made clear that the Government had to give written consent to the company before it could close down all sugar processing operations, a process completed earlier this year.
However, a spokesman for the Department of Agriculture said that farmers had decided to get out of sugar production, and Greencore had decided to stop processing sugar, so it was clear then there was not going to be an Irish sugar industry.
