Some 150 local farmers invested �7m in the Amelca plant, which opened three months ago.

The state-of-the-art �15m plant was intended to breathe life into local faming after the foot-and-mouth crisis last year.

Now the dairy at Dove Valley Park near Foston has been handed over to receivers.

Poor sales

The factory opened in May with 71 workers, but 35 of them were made redundant on Friday.

The plant is being run with the remaining staff by receivers Deloitte and Touche.

They say the company's problems have been caused by a slow take up in sales and are trying to sell the business as a going concern.

Farmers say the firm was not given enough time by its creditors.

This just puts out a message to other farmers that it is very risky getting involved with the food chain

Dib Atkinson, farmer

Dairy farmer Dib Atkinson, who invested in the plant and could lose money, said they were phoned up and told the firm would no longer be collecting their milk.

"We were just shattered, we could not believe it.

"The price we were getting for our milk was dreadful.

"Farmers were told for some time they should be nearer their users.

More money

"Amelca was buying milk from the local farmers who were involved in setting the firm up.

"We are trying to resurrect something from the company and if we can we won't lose our investment."

Ms Atkinson said the firm was not given enough time and support to get going.

"This just puts out a message to other farmers that it is very risky getting involved with the food chain."

Farmers are discussing whether to put more money into the plant, she added.