Norbord employs up to 700 people

Chairman of Peninsula Power, Tony Fitzsimons, said the fears of chipboard manufacturers Norbord, near South Molton, were unfounded.

Norbord directors say jobs are at stake because the Winkleigh plant will be competing unfairly for the same wood Norbord uses.

Mr Fitzsimons denied a claim that the company will get government subsidies.

Fierce market

He said: "There is plenty of waste wood, forestry wood and forestry fillings available, both nationally, locally and on an imported basis, to meet all of our requirements and with a considerable excess to that," he said.

"I don't see how we would be in any way challenging to Norbord's operation.

"We will be looking to co-operate with them and we certainly don't receive any subsidies."

The directors of Norbord, which employs up to 700 people, claimed the "unfair competition" would damage their firm which is already fighting to keep its share of an highly competitive market.

Director Steve Roebuck said: "There is a lot of competition coming in from overseas and the business is about survival right now.

"But when we are faced with the raw material stream being subsidised to another industry, then the economic survival is very questionable."