Lexmark has made printer cartridges at Rosyth for 10 years

The Lexmark computer printer factory in Rosyth was granted �5.6m in regional selective assistance when it was setting up in 1995.

It received a further �6m two years later and �275,000 in 2002.

Tony Blair, responding to SNP leader Alex Salmond in the Commons, offered his "deep sympathy" to affected staff.

The prime minister promised that ministers would do everything to help the workers who lost their jobs in the ''difficult times for them''.

The Scottish Executive said it planned to have talks with the firm about repaying the latest of the grants.

An executive spokesman said the assistance came with strict conditions which companies must meet, both for job creation and investment.

These included an "obligation period" applying to each sum granted and in the case of the two earlier sums this period had expired.

Expand production

The first grant, in 1995, was to help Lexmark set up the plant and was tied to a capital investment by the firm of �18m and the creation of 357 jobs.

The second, in 1998, was to expand production and was tied to an investment of �21.9m and the creation of 375 jobs.

The last grant of �275,000 related to a capital investment by the firm of �2.6m for a specific project.

This is extremely disappointing news and a very severe blow to the individuals and families affected Nicol Stephen Deputy First Minister

"The obligation period for the �5.6m ran out in 2001 and the obligation period for the �5.9m ran until June 2003," he said.

"The period of obligation for the �275,000 runs until April 2008.

"Our officials will be in contact with the company to discuss the impact their announcement will have in respect of a regional selective assistance grant offer of �275,000."

Efforts have been under way to assist the 700 workers facing redundancy.

Deputy First Minister Nicol Stephen has asked the local enterprise company to set up a "rapid-reaction team" to support the Lexmark workforce.

'Everything possible'

Scottish Enterprise will also be asked to develop an action plan for the area.

The workforce learned on Tuesday that 500 jobs are to go in April, with the final 200 going by the end of the year.

Lexmark has made cartridges for its inkjet printers at Rosyth for the past decade.

Mr Stephen said: "This is extremely disappointing news and a very severe blow to the individuals and families affected.