Astrazeneca has cancelled a planned £450m investment in a vaccine manufacturing plant in Merseyside, saying Labour have failed to match the previous government’s offer of funding.

It sees the pharmaceutical firm scrap plans to expand its existing facility in Speke, as announced by then-chancellor Jeremy Hunt at last year’s March budget, as first reported by the Financial Times (FT).

According to the newspaper’s sources, government officials last summer tried to cut the state support provided to the project from about £90m to £40m, but since then a revised offer was put forward, of significantly higher than £40m.

Under the Tories, around £70m was on offer in grants, as well as £20m in research and development support from the UK Health Security Agency, the FT reported said.

But the investment has been pulled just two days after Rachel Reeves cited life sciences as a key UK strength, in a speech on her plans to kickstart economic growth and make Britain appear attractive to international investors.

Confirming the reversal, a spokesperson for Astrazeneca said: “Following discussions with the current government, we are no longer pursuing our planned investment in Speke.

“Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government’s proposal.”

The existing facility – which supplies the flu vaccine – will continue to operate and no jobs are at risk, the PA news agency reported.