The permit application was refused on a 4-2 vote with Cr Jacinta Ermacora citing environmental concerns and councillors Peter Hulin, Brian Kelson and Peter Sycopoulis raising doubts about late changes to a recommended list of permit conditions.

It is likely the issue will end up in the Victorian Civil and Administrative Tribunal.

A more detailed explanation of the refusal reasons will be tabled at the August 11 meeting.

Midfield told The Standard it would review the council decision and consider its options.

The proposed upgrade would involve decommissioning the existing anaerobic lagoon network at Levys Point rendering plant, building new facilities to capture and use methane to fire boilers and construction of a sewer pipeline.

Environmentalists have been long concerned about the Levys Point operation because of its proximity to Merri River wetlands known as Kellys swamp.

A controversial $1.5m state government grant for the project was announced by Premier and South West Coast MP Denis Napthine earlier this year when he outlined the meat processing company’s plans for a $15m cold storage facility and dairy processing plant near the Scott Street abattoir.

Midfield last month also lodged planning applications for the dairy and meat cold storage projects with the city council.

The dairy plant will be built on what was Crown land and part of the council’s outdoor works depot on the southern fringe of the abattoir. 

Midfield bought the depot area for $1.7m from the council which bought it for $1.41m from the state government in a sale reported on the government’s new land sales website.

Proceeds from the sale will be used by the council to reconfigure the remainder of its depot site.

When he made the funding announcement Dr Napthine said the overall expansion would create about 200 jobs, but the funding application documents showed only 20 direct permanent jobs in the first year, expanding to 50 over three years, plus about 100 construction jobs and 80 indirect jobs in the farm supply chain.