UNITED MILK: THE MULTI-MILLION pound United Milk plant has gone into receivership, threatening the livelihoods of hundreds of dairy farmers and leaving the axe looming over 125 jobs.

Bosses at the farmer-owned plant in Westbury called in receivers PricewaterhouseCoopers on Tuesday, when banks pulled the plug on the £45m business.

More than 400 dairy farmers invested a total of £11m in the state-of-the-art facility, which opened last May, and now risk losing their cash.

Jobs at United Milk's plant in Northacre Industrial Park and its headquarters at White Horse Business Park, in Trowbridge, could be in jeopardy.

Local farmers have not been paid for milk supplies since the beginning of July.

Investor and supplier Bob Hole, who runs Church Farm in Atworth, near Melksham, said the news had rocked the farming world.

"We are absolutely shell-shocked but it's a double-whammy because we invest and supply," he said.

"This is a massive setback for dairy farmers like us. I invested £21,000 in the co-operative last year and United Milk had agreed to take away one million litres each year.

"There is only so much farmers can take after the BSE crisis, foot-and-mouth and now after this I think we will have to tighten our belts."

Supplier for United Milk, Alec Glass, from Stockham Marsh Farm, near Foxham has already lost £18,000 he is owed by the milk giants after they failed to pay-up for supplies dating back to June.

He said: "I knew they were having problems but they have been taking a lot of milk from local dairy farms this spring.

"We received an email on Tuesday telling us United Milk would not pay the £18,000 they owe us.

Dairy farmer and milk supplier Alan Gregory, of Saltbox Farm, in Box was told in May the company was prospering.

He said: "This has come as quite a shock because a letter from the chief executive in May said the company had turned the corner and was returning profits for the first time.

"Prices were even getting better over the winter they dipped to under 16 pence per litre but then rose to over 17 pence in the spring, which was a good indicator that things were healthy."

Auditors from PricewaterhouseCoopers were appointed on Tuesday to take over the administration.

Roger Marsh, joint administrative receiver, said: "We shall be holding urgent talks with suppliers over the course of the next few days and believe, with their support, we have the best chance to try and secure a future for the plant."

The National Farmers' Union supports co-operative projects such as United Milk and now fears the collapse could stop farmers joining other projects.

Ian Johnson, NFU south west regional spokesman, said: "This is tragic because the NFU is trying to encourage more co-operatives.

"This announcement is a disaster for farmers and a huge step backwards for the industry.

"It will be a horrendous time for farmers and everyone at the plant and sends a tragic message out about co-operatives."

The factory had a £100m annual turnover and opened last May.

It had the capacity to produce five percent of the country's milk and 800m litres of milk every year.