The Cambridge-based inkjet manufacturer issued a statement to the stock exchange last week after the employees of Xaar China resigned en masse over perceived "unfair treatment" of themselves and their customers.

However, the staff have since returned to work and claimed that they were actually on strike over their allegations that certain Xaar products were sold at a lower price in other regions.

Xaar chief executive Ian Dinwoodie told PrintWeek: "The entire staff resigned on the 20 January. They then returned to the office after Chinese New Year and claimed that it wasn't a real resignation.

"We had already accepted their resignation and as of tomorrow they will no longer be employees. They no longer represent the company and now as disgruntled ex-employees they're making unfounded and false accusations purely to try to damage the company."

Whilst the ongoing disruption is an inconvenience, Dinwoodie said that he did not believe it had yet done any reputational damage in China. "We've made direct contact with end customers and we're having very positive conversations with them over the phone," he added.

"The response we've had so far from customers is that they want to get on and do business. We've got a couple of people on the ground from next week for the initial meetings and we're looking to relocate around four UK staff for the next three months while we put in place a replacement structure, which we'd expect to be up and running by April or May time."

Xaar has been trading in China for more than 10 years and, according to Dinwoodie, has had similar problems in the past with Chinese staff and customers complaining about pricing.

"They always accuse us of selling to India cheaper than to China, which we don't - it's all properly set, transfer pricing, legally structured and all the rest of it but for some reason they seem not to accept that Xaar is free to trade in a free world," he said.

"It happens particularly on the older products where there's a huge install base around the world and people buy a lot of spare parts from wherever they can get spare parts from."

Xaar's direct sales into China last year represented around 12% of its total sales, with total direct and indirect sales believed to amount to no more than 20%.