Closure of the Forties oil pipeline as a result of the Grangemouth dispute could cost the British economy up to £50m a day according to Oil and Gas UK.

Up to 1,200 staff at the Ineos plant will strike on Sunday and Monday in a row over pensions.

Grangemouth powers the BP-controlled Forties pipeline at Kinneil processing plant, which provides a third of the UK’s daily oil output.

Unite Union leaders will hold a mass meeting with Grangemouth workers ahead of the strike to brief them on the latest situation. They have warned that the walkout could be escalated following the breakdown of talks on Wednesday.

Energy minister Malcolm Wicks said that the pipeline is a "crucial" piece of UK infrastructure; it receives about 725,000 barrels of crude oil and 80 million cubic metres of gas a day.

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As the strike looms closer, Unite and Ineos have been urged to hold further talks to resolve the dispute.

Motoring organisations have urged drivers not to panic buy as business at petrol pumps must remain steady.

Finance Secretary John Swinney said there should be enough fuel to avoid shortages.

Mr Swinney said: "What we are confident about is that we have taken preparations to make sure that there are ample supplies of petrol and diesel available well into the month of May."

Airport operator BAA has advised airlines to refuel at the point of origin in order to safeguard fuel reserves.

Ineos announced on Tuesday that it was taking legal action against Unite for "inaccurate and misleading" public comments made during the dispute.

The company said Unite had claimed that Ineos had "stripped £40m" from the Grangemouth pension fund when it was transferred in 2005.

"Unite believes that it is legitimate to comment that Ineos are responsible for the current pension plan being valued about £40m below what the value would have been had the full value of the fund been transferred in 2005," a spokesperson for the union said.

(GK/NS)