More than 700 jobs are at risk at Kellingley Colliery after one of the main contributors to a managed closure of the pit pulled out.
Pit operators UK Coal were working to finalise a £20m closure deal which would see the pit close within 18 months. Hargreaves Services Plc, which was expected to contribute £5m towards the deal, has announced it is no longer willing to help.
The deal, which also includes a £10m state loan and a further £5m from other private investors, would see the pit close by the end of 2015.
A spokesman told the Express: “Hargreaves were in a position where we offered a loan of £5m on commercial terms but unfortunately that’s no longer on the table.
“We went into the project in good faith and to support a fellow coal supplier but it’s proved to be very complex in terms of finding a way through this.
“Ultimately we are a public limited company, with our shareholders to think about, and we have reached a point where we cannot continue.”
Keith Hartshorne, the National Union of Mineworkers (NUM) delegate at Kellingley, said the news was bitterly disappointing.
He said: “The impact of this news is obvious to us but UK Coal have told us it’s business as usual and that doesn’t stand in line with what they’ve told us beforehand.
“They’ve been saying all along that if the deal wasn’t struck within certain time limits then there would be no business and the pit would close.
“Now, they’re saying they can still go forward from income that’s been generated at the pit and that’s what we’ve been saying all along - there’s still money to be made at Kellingley.”
The NUM announced proposals for an employee buyout of the pit last month in the hope of securing a long-term future for the site. Mr Hartshorne added: “They’ve said they’re going to speak to other people to see if they can get someone to replace Hargreaves and we’ve told them not to forget about us and our employee buyout.
“We wouldn’t be able to step in at this point but we might be able to fast track our approach. It’s all about saving the pit so we will do whatever we can.”
UK Coal said it was working with other investors and the government to find an alternative solution.