The Government has turned down a request from Waterford Crystal for a State-guaranteed loan to help it stay in business, RTÉ News has learnt.

The troubled glassmaker, which is one of the biggest employers in the southeast, had asked the Government to underwrite a bank loan of €39m.

It is understood the Government hired consultants which advised on the issue.

The Government has indicated to the company any future requests for aid will be sympathetically examined.

Waterford Crystal has been one of Ireland's best know brands since the 18th Century, but the economic downturn and the recent collapse of the dollar has threatened its future.

In recent weeks it made a request to the Government for financial aid.

It is understood that the money would have been used to finance a restructuring of the company. That plan has included laying off 490 staff.

But this evening it has emerged that the request has been turned down.

The Government has however indicated it believes the company has a solid future.

It has also left the door open for other State agencies help the group in future.

The company is still waiting for official confirmation that its request has been turned down, but a spokesman said rejection would be a disappointment for the company.