A £12m joint private and public sector funding agreement has been signed that will see used plastic bottles turned into packaging for fresh produce and other food products.

The funding will see the first plant in the UK to recycle plastics into material for food packaging opening in December 2007. Located in Dagenham, it will be operated by Closed Loop London.

The plant is described as being set to transform the recycling of polyethylene terephthalate (PET) in the UK, turning millions of bottles back into new food packaging each year and ensuring that 35,000 tonnes of packaging will be recycled.

Closed Loop London project manager, Olivia Tait, confirmed to Commercial Grower that the recycled material will be food contact approved, making it ideal for use in salad bowl, trays and numerous other applications for the fresh produce industry.

Marks & Spencer has become the first major retailer to commit to sending plastic waste from its London stores to the Closed Loop London plant, and will be encouraging its suppliers to source recycled PET from the plant to make M&S packaging.

The project has received private equity funding from Foresight Venture Partners and a banking facility from the Allied Irish Bank. It has also received public sector funding from the London Development Agency and WRAP.

The 35,000 tonne capacity plant will use patented technology developed by South Carolina-based United Resource Recovery Corporation to sort, granulate and super-clean the recycled plastic bottles to a high quality raw material that has been tested extensively.