Truro-based Century Litho went into administration with Smith & Williamson last month and the company has since ceased trading.

It has emerged that the company went down less than a year after it was awarded a £650,000 grant from the RDA, as part of a £3m package for a move to a new facility in Redruth.

Although the RDA has said that it will be seeking to get the funding back from the administrator, a spokesman for the government organisation told PrintWeek: "It may be some time before we know from the administrators what the likelihood is of the RDA’s investment being recouped."

The grant was approved in August last year from the government's Selective Finance for Investment Scheme (SFI). According to the LDA, one of the reasons it was given was to "safeguard some 52 jobs".

To date £520,000 of the grant has been used.

Stephen Bohane, head of business development for the South West RDA in Cornwall and the Isles of Scilly, said: "By their nature, SFI investments are always slightly higher risk and are designed to support projects that might not happen otherwise, but all grant applications are thoroughly appraised against a range of criteria and include a full risk assessment.

"All grant funding contracts also contain conditions to safeguard public funds, such as guarantees from parent companies or debentures, and that is the case with Century Litho. Clearly we will be discussing these matters with the administrators with a view to recouping all our investment.

"In the meantime, the RDA is working to assist the local authority and agencies such as Jobcentre Plus to ensure a coordinated response and to help those affected in the workforce to get the right advice on jobs, training and any other assistance available."

Smith & Williamson declined to comment.