John Smith & Sons in Aberdeenshire has failed to win £1m in funding from the Big Lottery, and is having to close as a result.

According to The Press & Journal, over 25 workers at the New Pitsligo bakery have lost their jobs. The company, founded in 1903, had an ambitious £1.4m expansion plan, but the Big Lottery rejected its proposals.

The business was rescued from closure by community-based Fraserburgh Development Trust when it took it over in 2014, after owner John Smith decided to retire.

The effort saved 25 jobs and was welcomed by former first minister Alex Salmond, then MSP for Aberdeenshire East, who described the business as “vital to the local economy”.

The trust has now said it decided to shut down the 110-year-old operation immediately, due to environmental health concerns over the site, as well as rising repair costs.

Fraserburgh Development Trust chairman, Ian Watson (pictured), said: “A great deal hinged on the Big Lottery decision, mainly the funding towards the project and the new build, which will sadly not go ahead now… Everyone is very disappointed at the outcome.”