Aid for Belfast plant opposed

European textiles manufacturers yesterday pledged to continue their long-running legal battle over state aid for a pounds 157m Taiwanese investment project in Northern Ireland.

The British Apparel and Textiles Confederation (BATC) said it had decided to appeal an earlier ruling in the European Court, which had argued that Commission officials had not broken any rules when they sanctioned the UK government's pounds 61m package of subsidies for the plant, to be built by the giant Hualon Corporation.

British manufacturers say the Hualon plant, which could create up to 1,800 jobs in a deprived area north of Belfast, would unfairly use the state aid to increase production capacity in an industry undergoing a dramatic process of downsizing. John Wilson, director general of the BATC, said: "The concerns we have about Hualon are as great as they ever were. The statistics confirm our main point that the industry is stagnating or declining and an investment of this size, which increases capacity in the industry by 20 per cent, is clearly ridiculous."

Mr Wilson declined to give details of the the appeal, which he said was largely on technical grounds. So far the European association which represents clothing companies such as Coats Viyella and Courtaulds Textiles is thought to have spent around pounds 60,000 fighting the investment.

Northern Ireland's Industrial Development Board (IDB), the government body responsible for inward investment, said it had "noted" the BATC's announcement but refused to comment further.

A spokeswoman also declined to elaborate on persistent rumours that the IDB is planning to scale down the project, which will be built in several phases. Bruce Robinson, the IDB's chief executive, is recently believed to have visited Hualon on a trip to the Far East. The whole of the pounds 61m aid will only be paid out if the entire project is completed.

However, the decision to appeal to the European Court is likely to further delay the start of construction work.