MINISTERS are preparing to claw back millions of pounds in public funding from Michelin if it pushes ahead with closing its Dundee plant.

Almost 850 workers face losing their jobs at the factory, which has been a feature of the city’s manufacturing landscape since 1972. 

Economy Secretary Derek Mackay said he was looking at "every possible avenue of support" to protect as many jobs as possible – including pumping more cash into the plant.

Officials revealed almost £8 million of public funding could be clawed back if Michelin closes the facility.

Mr Mackay was in Dundee for the first meeting of a 17-strong “action group” of politicians, industry experts and union leaders tasked with saving the factory.

He said the group was “working really hard, really energetically to try and get the best outcome we can by putting a case to Michelin to stay in Dundee”. 

But he insisted: “We don’t want to give false hope. We don’t want to raise expectations beyond what’s achievable.”

He said: “There is the sense still of disappointment at Michelin’s decision to close the plant, and they have made it clear to me that they don’t wish to revisit that decision. 

“What they are interested in is the proposition that we can put to them. John Reid, who is the local plant manager, said it’s unprecedented for Michelin to give such a hearing."

He added: “So the mood is one of disappointment at Michelin’s decision, but actually some hope that we can salvage something from this decision that will ensure that Michelin has a future [in Dundee], and protect those 845 workers at all costs.”

Options being considered include pumping more public money into the factory or handing Michelin a tax break. Ministers are examining whether the plant could be repurposed, with a new focus on research and development. 

But Mr Mackay dismissed suggestions a recent hike in business rates had played a part in the threatened closure. Michelin has seen its tax bill rise by more than £300,000 in the last five years.

He said: “Right now, we have an unprecedented opportunity to present a proposition to Michelin to stay. 

“That’s what the workforce expect, that’s what the city expects, and that’s what I’m focused on.”

Since 2011, Scottish Enterprise has handed Michelin almost £8m in grants to modernise its Dundee facility. One payment in 2015 aimed to boost capacity and longevity.

Last year, £1.5m of a wider £4.5m grant was handed over to install cutting edge electric tyre curing technology – the first of its kind to be rolled out by Michelin.

Officials said the grants could be recouped if the Dundee factory closes, as conditions attached to the payments – which include maintaining a certain number of jobs – would be broken.

Michelin previously agreed to consider any proposals brought forward before the end of the month.

Speaking after Monday's meeting, Mr Mackay reiterated his call for the UK Government to commit an additional £50m to the Tay Cities Deal, aimed at bringing long-term investment to the area.

Holyrood ministers have pledged £200m to the scheme, but their counterparts down south have failed to match this and promised just £150m.

Scottish Secretary David Mundell insisted the commitment from UK ministers represented “a very significant contribution to the future of the local economy”. 

He said: “We have been very clear that it’s not a competition. We took forward the proposition that we did on the basis of the projects and the situation that we found ourselves."

It came as Mr Mundell announced a £5m investment in Dundee's world-leading games industry.

Devastated workers at Michelin’s Baldovie complex were told they faced losing their jobs last week.

It was a devastating blow to a city which recently celebrated the opening of the £80 million V&A design museum. 

Nicola Sturgeon has pledged to leave “no stone unturned” as ministers scramble to save the site.

Michelin, which is the largest industrial employer in Dundee, blamed a struggling market and cheap imports for its decision.

Dundee City Council leader John Alexander said he was under “no illusions” about the struggle ahead.

He said: “The reality is, the ripple effect this has is quite significant. And at a time when we are trying to revitalise, re-energise the local and regional economy, this clearly sends the wrong message.

“We are absolutely laser focused on getting a positive outcome for as many of those workers as we possibly can, and retaining a footprint for Michelin, whatever that may look like.”