The State and ICI, who are joint shareholders of the firm, turned down a rescue plan earlier this year saying the plant was not commercially viable.
Volatile market conditions mean it is cheaper to import fertiliser than produce it here and the company was seeking a cash injection from the State to stay afloat.
But unions hit out at Tánaiste Mary Harney who said she had betrayed the workers.
Stephen O’Riordan, a workers’ representative with 25 years’ experience at IFI’s plant in Cobh, Co Cork, said: “We’re saddened, shocked, we feel betrayed. We were led up the garden path.”
Ms Harney defended the decision and said taxpayers had pumped €34 million into the company in the last two years and some €750m since the firm was established in 1961.
“I made it clear last month that the Government could only contemplate investing more money in the company in the context of a viable business plan. I regret very much that, despite the very considerable efforts of the company in this regard, it has not been possible to produce such a plan.”
The closure of IFI means more than 600 jobs will be lost in Belfast, Arklow and Cork, but the area surrounding the Cobh plant is expected to be the hardest hit. The direct loss of 200 jobs there means the local economy will lose around €16.5m a year. It also threatens the future of the Cork-Cobh railway service which benefits from a thrice daily fertiliser freight service.
The east Cork area has been hit by a spate of closures in recent years including the Irish Ispat steel firm in Cobh, Youghal Carpets in Carrigtwohill and Universal Foods in Midleton.
Fianna Fáil TD for Cork East, Ned O’Keeffe, said the closure was a major blow and he called on the Tánaiste to take firm action to save the jobs. “I don’t think she can stand idly by while this tragedy happens. I must stress that setting up a task force is no answer. It’s merely a cosmetic political device.”
Fine Gael’s Cork East TD, David Stanton, said many of the workers did not have transferable skills and would need all the help they could get to find employment. “A task force isn’t good enough, we want action. The Government and the State agencies have to do everything possible to act and find employment,” he said.
The IFA said it was disappointed that events had forced the liquidation of IFI. A spokesman said competition was needed in this sector.