Chemical company Ames Goldsmith has turned down cash from the Regional Growth Fund after shelving expansion plans.
The company, which has occupied the former Kodak plant in Kirkby since 2006, said the plan to produce chemicals for the solar power industry was dimmed by overproduction in China. An RGF application was successful but Ames in April 2011 but Ames withdrew its application earlier this month.
Site manager Rob Garrett said: "We would have loved to have used the RGF support – but market condition changed, so that we could no longer justify the project.
"We were looking to invest in production of chemicals for the photovoltaic market. However, due to overproduction and overstocking from the new plants in China, demand dropped massively last year – our US plant could then easily meet the needs.
"As the market grows again it will all be in Asia so unfortunately there is no need for a project of this scale in Europe."
Ames Goldsmith produces silver-based chemicals for the photographic, medicinal and electronic industries. Last year it was named North West chemical company of the year.
The Regional Growth Fund is a pot of cash designed to create and safeguard jobs in disadvantaged communities. So far, £1.4bn has been awarded to 176 companies.
Earlier this month the government said nine successful RGF bidders had withdrawn their applications, worth a total of £13m.