The cheese packing plant is due to close in April

The Dairygold cheese packing plant in Felinfach, Ceredigion, is due to close in mid-April with the loss of 115 jobs.

BBC Radio Cymru's Manylu programme has learned production lines bought with grants intended to safeguard Welsh jobs have been sold to a plant in England.

The firm said it was in talks over any repayments of the �663,000 grant aid.

Liberal Democrat MPs led by Ceredigion's Mark Williams met the Welsh Secretary Peter Hain on Thursday morning to raise the issue of what happens to public money given to Dairygold.

Safeguard jobs

Plaid Cymru Ceredigion AM Elin Jones has also called for the money to be returned.

Mr Hain said it was up to the Welsh Assembly Government to claw back the money.

In 2002, the company was granted a �663,000 "marketing and processing grant" to buy machinery to help safeguard local jobs.

But Manylu has found that machinery at the factory has now been sold on to the Kerrygold company, and is in the process of being moved to Kerrygold's cheese packing facility at Leek in Staffordshire.

Dairygold owns a substantial share of Kerrygold, through its membership of the Irish Dairy Board.

'Honour obligations'

A statement from Dairygold said: "The objective was to develop an efficient and competitive cheese packing operation.

"We acknowledge and fully appreciate the assistance of the Welsh Development Agency, including grant aid, and the commitment of the workforce and regret that despite the best efforts of all involved, the facility did not achieve viability.

"Dairygold... will honour all its obligations in full in regard to any matter arising from the closure."

The company added: "Discussions are under way... to finalise details of any repayments due."

'Claw back support'

According to a statement from the Welsh Assembly Government, officials were unaware that the packing lines had been sold on to Kerrygold, and that both companies were closely connected.

A spokesman said: "Welsh Assembly Government officials are in discussion with the company about claw back of the public support that was given for the building and the equipment.

"Every effort will be made to ensure that, in the light of the particular circumstances of a proposed sale, the maximum amount of grant is recovered.

"Officials have written to the company reinforcing the assembly's position regarding recovery of grant. The company is currently considering its response."