A court in France has ordered the liquidation of Spanghero, one of the meat processing firms at the centre of Europe's horsemeat scandal.

The judgement carries the proviso that Spanghero be allowed to continue trading for the next three months while a buyer is found for the company.

"This is a very painful outcome for all of us and we are totally aware of its consequences on jobs," said Spanghero chairman Barthélémy Aguerre. "The maximum has been done to turn around the business but today Spanghero is recording a decline of 50% in its turnover and incurring heavy losses."

Spanghero was acquired by co-operative Lur Berri in 2009 when it was on the point of going bust.

In 2012, it returned to break-even. However, allegations in February from the Government that it knowingly passed off horsemeat as beef and the suspension of its health and safety licence for several days, compromised Spangero's future.

It continues to deny any wrong-doing.