Managers at IFI, which has plants at Cobh, Arklow and Belfast, yesterday met officials at the Enterprise Department where they outlined a number of options which could secure the future of the company which is jointly-owned by the State and chemicals conglomerate, ICI.
IFI is in crisis due to the fall in demand for fertiliser in Ireland and across the western world as environmental concerns compound a range of difficulties currently facing farmers.
In July the firm's two shareholders turned down a request for an injection of funds totalling some 25 million euro.
Concern is growing that if IFI was forced to close, some 200 jobs and 16.5m euro per year could be lost to the Cobh area and similar damaging consequences would result in Arklow and Belfast. But Government officials last night indicated that the situation poses serious difficulties due to the collapse in world markets.
A spokesman for the Tánaiste said further contacts between the Enterprise Department and IFI management were likely in the coming days.
"The Tánaiste will be kept fully informed on the situation and all options will be carefully studied," the spokesman said.
Ms Harney has already told union leaders at IFI that the Government will consider rescue plans but she has also warned that everything depends on the firm's future viability.
The country's biggest union, SIPTU, yesterday warned that the Government must also consider the nation's strategic needs, warning that if IFI failed, Ireland would be totally dependent on imports.
SIPTU leader, Noel Dowling, said the workers were prepared to play their part in making more savings and this followed earlier co-operation in making economies.
Cork East Fine Gael TD, David Stanton, called on the Government to quickly address problems faced by IFI management. "If this plant closes it will have a knock-on effect on the local economy. We have already had a devastating blow to Cobh with the closure of Irish Ispat," Mr Stanton said.