Ireland's beleaguered pigmeat industry was facing devastation today after European officials rejected pleas for an emergency compensation package.

With the future of thousands of farmers and pork producers hanging in the balance, authorities in Brussels insisted they would not step in to bail out the Irish Government.

The country's agri-sector was thrown into disarray when pigmeat products - some contaminated with a toxic substance up to 200 times the safe level - were recalled from 21 countries worldwide.

Irish premier Brian Cowen had suggested the Government would attempt to salvage the crisis-hit industry by applying to the EU for funding for compensation.

But Michael Mann, European Commission agriculture spokesman, dismissed the approach.

"There is no basis on which we can pay out money to compensate people from European funds for destroying the meat," he said.

"We do not have a legal basis for that."

More than 1,700 pig factory workers have already been laid off less than three days into the crisis.

Processors, who refuse to reopen slaughterhouses until compensation is paid by the state, resumed crunch talks with Irish Government officials over a multi-million euro package to rescue the sector.

Mr Mann said Ireland could offer compensation out of its own Exchequer coffers, including up to 7,500 euro (£6,533) for each affected farmer over a three year period, or establish that the contamination was an exceptional circumstance allowing the Irish Government to cover 100% of the cost.

"But the idea of the Commission sending some European money is not a possibility," Mr Mann added.

Europe can only offer compensation if an animal disease forces farmers and producers to destroy livestock, as happened in the wake of the BSE and foot-and-mouth crises.

The Siptu trade union claims up to 6,000 jobs are at risk in the industry after Irish pork products were recalled from 12 EU countries and nine non-EU countries.

Irish Tanaiste Mary Coughlan said any lay-offs to date would not be permanent.

"These are temporary lay-offs," she said.

"People are very anxious to get back to work, very anxious to get meat product back on the shelves, and, as Minister for Enterprise, Trade and Employment, I am very anxious and am working with my colleagues to ensure that that happens and that we can restore consumer confidence."

It is understood the Irish Government offered to buy millions of euro worth of wasted pork stocks from processing plants in a bid to reopen them.

But farmers are believed to be also seeking around 8 million euro (£7 million) compensation for up to 100,000 pigs that have to be destroyed on farms which used contaminated feed.

Meanwhile, the Environmental Protection Agency (EPA) and Irish police are continuing to probe activities at Millstream Power Recycling Limited, in Co Carlow, where oil used in a burner to heat food products being recycled in to animal feed was deemed "inappropriate".

The unlicensed oil used in a burner to dry foodstuffs tainted breadcrumbs which were supplied to 56 farms in the Republic of Ireland - 10 pig and 37 beef - and nine farms in Northern Ireland.

Officials in Northern Ireland confirmed that eight beef farms there used the feed, and not pork farms as initially believed.

The UK's Food Standards Agency has lifted a ban on selling pork products from Northern Ireland.

Farmers both north and south are now hoping that the smaller concentrations fed to cattle will mean their livestock do not suffer the same fate.

The Republic's Department of Agriculture is expected to publish its findings on 37 herds at farms across the Republic, which have been quarantined, later today.