A $20 million handout for SPC Ardmona could be sealed by the end of the week as the Victorian government battles to keep the company's fruit processing operation afloat.
The future of the Shepparton cannery is in doubt after the federal government refused to honour a commitment from its Labor predecessor to provide $25 million for an upgrade.
That deal, signed days before last September's federal election, would also have meant a $25 million contribution from the Victorian government.
The status of that state contribution is unclear and some sources suggest it was never finalised. The Australian Financial Review understands negotiations have continued between SPC Ardmona and the state.
Sources said a figure of about $20 million has been offered to the food producer but that negotiations around the terms and conditions were still being finalised. Following media reports on Wednesday that the government had signed a $30 million deal, Premier Denis Napthine denied the package and said he made a "passing reference" to SPC Ardmona when he met with Prime Minister Tony Abbott on Tuesday. He also refused to say if an agreement would be reached soon.
"The government is having ongoing discussions with SPC and Coca-Cola Amatil," Dr Napthine said.
A spokesman for Peter Ryan, Victoria's Deputy Premier and Minister for Regional and Rural Development, said: "The Victorian Coalition government remains a strong supporter of SPC and the Goulburn Valley region."
On ABC Radio, Mr Ryan refused to say how much had been offered to the fruit processor. "The initial issue is as to whether these constructive discussions can conclude with an agreement between the parties," Mr Ryan said. "That is still a matter under conversation at the present time."
SPC Ardmona and Coca-Cola Amatil refused to comment.
A decision on the plant's continued viability is expected to be made at a company board meeting next week.
Last week Victorian Opposition Leader Daniel Andrews said if elected his government would contribute $30 million in assistance to SPC Ardmona.
The prospect of a closure of the plant sparked off a fierce debate about industry assistance. Dr Napthine has split with Mr Abbott, arguing that "co-investment" with a company was not corporate welfare.
The Premier is under intense pressure over job losses in the state's heavy industrial base, especially after car makers GM Holden, Toyota Australia and Ford Australia all announced they would cease manufacturing in Australia.
There are also serious questions over the future of Alcoa's Point Henry smelter and Shell's refinery at Geelong.