More than 50 jobs have been lost after the closure of an Auckland manufacturing company that was forced to relocate to make way for the Waterview motorway extension - and a union says the firm's failure is "entirely the Government's fault".

Wire by Design, which made metal and wire products, went into receivership last week owing the Inland Revenue Department almost $1 million. The Engineering, Printing and Manufacturing Union said the company was closed down on Monday, with the loss of 55 jobs.

Over the past three years, Wire by Design has fought a legal battle with the Government-run NZ Transport Agency (NZTA) over a compensation claim for lost business, which resulted from its factory being moved in 2010 from Mt Roskill to Onehunga to make way for the motorway's construction.

During that time, the company, which last year acquired the assets of the failed Faulkner Collins engineering business, fell behind on its payments to the IRD, the EPMU said.

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Wire by Design director Hadley Wright has claimed NZTA owed the firm $2.6 million in compensation for a seven-month period in which it was unable to operate, according to a media report published last week which also said the company's new factory lacked the "functionality" of the original site.

EPMU national industry organiser Joe Gallagher said Wire by Design's owners had made every effort to secure the fair compensation package that the firm was entitled to by law. "It was this package that would have kept the company in business, kept jobs going and enabled it to pay its debts."

Gallagher said that under the Public Works Act, the Crown was obliged to relocate a business to an alternative site on a "like-for-like" and "same functionality" basis.

The "tragic irony", he said, was that workers being made redundant because of the non-payment of taxes to the IRD would end up being paid by the Government in benefits.

NZTA's regional manager for Auckland and Northland, Stephen Town, said it would be inappropriate for the agency to comment as the matter was still before the court. "We hope that there is a satisfactory conclusion to this matter," he said.

Gallagher said the EPMU was working with its members at Wire by Design to ensure they received their full entitlements.