The European Court of Auditors has found that the closure of the Greencore sugar plant in Mallow in 2006, with the loss of 240 jobs, may not have been necessary.

The closure came about as a result of a major restructuring of the EU sugar sector following world trade rulings and a drive to make the sector more competitive.

But in a highly critical report published this afternoon the Court of Auditors says that the European Commission was using out of date information, that overall sugar production had become less competitive as a result of the reforms, and that the cut in prices was not passed on to consumers.

Ireland's member of the European Court of Auditors, Eoin O'Shea, told RTÉ News: 'It's possible that [the Greencore Plant] would still be operating today if it were not for the sugar reforms introduced by the European Commission.'

In 2005 and 2006, the EU negotiated a major reform of the sugar sector partly because subsidised European production allegedly hurt small producers in the developing world.

The plan was to reduce production by 6m tonnes or 30% by 2010 and it was partly done by cutting the price of sugar by 36%.

At the time, there were 285,000 sugar beet growers in the EU, a figure that has since been reduced to 164,000.

In all 75 sugar factories, including the Greencore plant, closed with the loss of 20,000 jobs.

According to the report into the sector by the Luxembourg-based European Court of Auditors, Ireland was the only member state with just one factory to close.

It described the factory as 'large, modern and potentially efficient'.

The European Commission had argued at the time that only factories that became unprofitable after the price cuts were implemented would have closed.

However, today's report shows that 'no comparison of the productivity of individual producers or factories was available'.

It also showed that the Commission was using data from 2001 and that it had not taken account of changes within the Greencore operation when its proposal was made in 2005.

Overall, the report says, sugar production was not made more competitive. It is now controlled by a small few - 75% of the EU's production is now carried out by only six industrial groups.

It says that ultimately the EU has had to become a net importer of sugar, whereas before it was a net exporter. It also said that reductions in the bulk price of sugar were not passed on to the consumer.

Ireland received €213m in restructuring aid after the closure of the Greencore plant, in which 240 factory workers and 3,700 growers lost their jobs.

At the time, much of the debate during the negotiations between member states and the European Commission was over compensation and how much should be shared between Greencore and the workers.

Some Irish farmers fought for the plant to be kept open, while others focussed on what compensation could be achieved.

Ireland East MEP Mairead McGuinness said: 'It is very clear that the Commission has questions to answer arising from the Court of Auditors report. Lessons need to be learned.

'The sugar reforms resulted in the complete loss of the Irish sugar industry.'

Fine Gael Agriculture, Fisheries and Food Spokesperson Andrew Doyle said the report leads to the inescapable conclusion that the Government of the time was asleep at the wheel.

Labour Agriculture Spokesperson Sean Sherlock said that in the wake of the finding, serious questions arise as to the suitability of Mary Coughlan for high office.