Hundreds of jobs are at risk at Muller’s dairy operation.

The company proposes a “phased wind down” of its Chadwell Heath operation which would threaten up to 389 permanent posts.

Managing director of Müller milk and ingredients Andrew McInnes said: “Regrettably, it is clear the dairy is no longer economically viable. It requires complete overhaul and modernisation.

“In an industry which has struggled for many years we cannot justify committing the level of investment required to bring this site to an acceptable and sustainable level of performance.”

Muller bosses, who took over the site from Dairy Crest in December last year, will enter into talks with dairy staff later this month in a 45 day “consultation”.

The news, announced yesterday, came at the same time as the company announced proposals for a £60m investment in separate facilities in Gloucestershire and Lincolnshire.

Mr McInnes added: “We will listen to our colleagues and rigorously assess the situation in Chadwell Heath before arriving at a decision.”